How Facebook Inc (FB) Is Moving Fast to RUIN Snapchat

Are Facebook Inc (FB) CEO Mark Zuckerberg and Snapchat CEO Evan Spiegel becoming the modern embodiment of the Steve Jobs-Bill Gates dynamic that colored the strained relationship between Microsoft Corporation (MSFT) and Apple Inc. (AAPL) for so long?


It might be a little early to take it that far, especially as it regards Spiegel and Snapchat, which is not yet public. But given recent developments, you have to imagine that things are tense between the two tech titans.

What “recent developments,” you might ask?

Well if we’re being honest, it’s getting a little tough to keep track of them. But reports that Facebook is exploring ways to reimburse verified content creators are hands-down the most notable news items.

FB: If You Can’t Buy ‘Em, Kill ‘Em, Inc. (AMZN) CEO Jeff Bezos is probably the ultimate modern-day tech assassin, with notches like Circuit City and Borders in his belt. FB’s Zuckerberg, for all his talk of “connecting the world” and whatnot, seems a somewhat unassuming merchant of death.

But according to a report yesterday from The Verge, Zuck is taking aim. The social network quietly released a survey this week that included the following:

“[A] broad range of ways that users could make money or promote a cause, including a tip jar, branded content, and taking a cut of the ad revenue Facebook earns from posts. The survey also asked users to indicate their interest in a “call to action” button, a way to let followers make donations, and a ‘sponsor marketplace’ to match users with advertisers.”

How exactly is that tantamount to an all-out war against Snapchat? It’s not, when viewed in isolation. But when taken in toto … it’s on.

FB famously tried to buy Snapchat for $3 billion in 2013 — a deal Snapchat’s Spiegel was ridiculed for rejecting. Just two years later, Zuckerberg was the one looking like a dolt as Snapchat garnered a private valuation of $15 billion.

In 2016, Snapchat is too large of a problem for FB to ignore. Snapchat users now spend 25 to 30 minutes a day on the app, and watch about 8 billion videos per day as well — the same amount of traffic Facebook Video saw at last count.

Part of the way Snapchat attracts users and their attention is the large celebrity presence on the platform. Believe it or not, Snapchat has made millions of people care what DJ Khaled is doing on a day-by-day, hour-by-hour basis.

This massive audience is fracturing the TV advertising budgets of corporate America, and brands are shelling out major dough to Snapchat for the privilege of creating video content on the platform. More importantly, Snapchat celebs are taking major money from advertisers themselves, sometimes making upwards of $100,000 in a single week.

Can you see now why FB might want to address this issue? The mesmerizing content from celebs is clearly finding an enthusiastic young audience — an enthusiastic young audience Facebook really wants for itself.

Here’s a portion of the recent FB survey exploring how content creators would (hypothetically) prefer to be reimbursed or promoted:


Different formats might be preferable for different celebs and content creators, and Facebook hasn’t actually committed to anything yet. But it seems clear that some of the most valuable creators will flee to (or remain at) Snapchat — ultimately at Facebook’s expense — if it doesn’t do something soon.

It’s rare that anyone beats Zuckerberg to the punch at his own game. Maybe ol’ MZ saw this happening back in 2013 but simply couldn’t justify paying more than $3 billion for a video-sharing app.

Regardless, FB stock owners have to pay close attention to Snapchat now — I have a feeling Spiegel and his creation will remain a persistent thorn in Facebook’s side for years to come.

As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at

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