Twitter filed its 10K with the SEC on Monday, and it came with a surprise element: the name of rival Snapchat in it. This is actually a feather in Snap’s cap that it has been mentioned in Twitter’s annual report. Snapchat will mark its grand Wall Street debut later its week with its highly-anticipated IPO.
Why Twitter mentioned Snapchat
Twitter mentioned the name of Snapchat’s parent company, Snap, twice in its annual report, according to Business Insider. The micro-blogging firm has been struggling for a long time with declining revenue, stagnant user growth and its inability to check harassment on the platform.
If Twitter is able to improve user growth, then most of its problems will be solved. Hence, the company named many companies, whose target users are the same as its own, and Snap is one.
In its report, the company acknowledged that “competition for users of our products and services is intense.” Detailing its rivals, the micro-blogging firm said in its report: “Facebook (including Instagram and WhatsApp) and Google (including YouTube) and Snap, as well as largely regional social media and messaging companies that have strong positions in particular countries.”
Further, the report read that a major problem that the company is facing because of competition is that its ability to secure content such as live premium video content rights from traditional television providers and other digital distributors is becoming limited. It’s facing difficulty in securing the desired content on economic and other terms that would be acceptable to it in the future.
What’s the difference between the two?
Making a comparison between Snap and Twitter makes no sense, according to analyst James Cakmak of Monness, Crespi, Hardt & Co. According to the analyst, the only thing common between the two is that the number of daily active users is same.
The major difference between the two lies in innovation. In a note on Monday, the analyst argued that no innovation has taken place at Twitter for the past several years, but the pace at which Snap is innovating is really commendable. And Snap is doing all this “while changing the way its users and content partners think about the platform and the future of communication and advertising.”
Hence, investors and users are excited about Snap, unlike Twitter, which is only reeling under problems but is neither innovating nor improving.
On Monday, Twitter shares closed up 0.5% at $16.06. Year to date, the stock is down more than 1%, while in the last year, it is down more than 10%.