Snap Inc. (SNAP - Free Report) recently announced the addition of a feature called Context Cards to its messaging application, Snapchat. The company is initially teaming up with nine companies namely TripAdvisor (TRIP - Free Report) , Foursquare, Michelin, Goop, OpenTable, Uber, Lyft, Resy and Bookatable, and expects to add more partners down the road to boost the service.
The feature will allow users to view information related to the places that are geotagged to the images or videos uploaded on the application. It will further enable users to reserve a table at a restaurant as well as book a cab to the location.
“Snapchatters” can view the feature by swiping up on a Snap that has the “More” option on it. Moreover, the Stories feature has also been integrated into it, which simplifies the process to view more Snaps of the desired location.
Per Business Insider, the company estimates users to send over a trillion Snaps this year or nearly 3 billion daily. The company also believes that “with Context Cards, Snaps have become the visual starting point for learning more about the world, empowering our community to get more information about anything that catches their eye.”
Reportedly, Context Cards is co-produced by “mobile search company”, Vurb, which was acquired by Snap for more than $100 million in 2016. The feature will initially be rolled out on both Apple’s iOS and Alphabet’s (GOOGL - Free Report) Android applications in the United States, Canada, the United Kingdom, Australia and New Zealand.
New Features to Boost Growth
Snap has been experiencing a slowdown in its user base and revenue growth rates. Notably, shares of Snap have lost 41.4% of their value since its listing date of Mar 2, 2017 against 10.6% growth of its industry.
Further, market research firm, eMarketer has once again slashed the 2017 U.S. ad revenue estimates for Snap from $770 million to $642.5 million. The market research firm had earlier in March slashed the domestic ad revenue forecast from $805 million to $770 million.
Snapchat has added a number of features such as Stories in Search, 3D World Lens, Custom Stories, Snap Maps and Geofilters to make its platform more attractive to users as well as advertisers. It recently collaborated with artist Jeff Koons to unveil an art platform and rolled out 3D Bitmoji World Lenses last month.
Moreover, recently, a report by Axios mentioned Snap to have witnessed a 40% increase in submission of Stories since it unveiled its location-based Map feature in June 2017. With the addition of the Context Cards feature, we believe this figure will increase further.
As we know, user growth holds the key to attracting advertisers, which is the primary source of revenues for Snap. A slowdown in user base may look unattractive to them. We believe Snap’s continuous efforts to boost its user base and win over investor confidence will increase the number of advertisers on the platform and thus enable the company to earn more revenues.
With addition of Context Cards feature, Snap users will no longer have to depend on other search engines like Yelp (YELP - Free Report) or Google.
However, competition from Facebook (FB) poses a serious threat to the company. Facebook has started to mimic Snapchat features on its platforms to boost user growth and engagement levels and has also succeeded in making these more popular than Snapchat.
Snap has a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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