WhatsApp Status delivers another 'kick in the teeth' for Snapchat

Facebook has been steadily incorporating more Snapchat-like features into its platforms. The latest, WhatsApp Status, could seriously limit Snapchat's growth in developing countries.

Whatsapp: rolls out more updates to take on rivals Snapchat and Facebook
Whatsapp: rolls out more updates to take on rivals Snapchat and Facebook

Stephen Upstone, chief executive and founder of LoopMe, said WhatsApp’s status update, "will certainly be a kick in the teeth for Snapchat".

He said: "On the eve of Snap’s flotation, the new WhatsApp features are built to take on even more of Snapchat’s market share, following the launch of Instagram’s new video features last year."

Even before Instagram launched its "live" feature, its Stories function was identified in Snap’s IPO filing as a potential risk: "Instagram, a subsidiary of Facebook, recently introduced a 'stories' feature that largely mimics our Stories feature and may be directly competitive."

Snap has already revised its initial IPO target of $25bn (£20bn) down to between $19.5bn and $22.3bn after negative investor feedback.

Now, with Snap facing investor questions around user growth, including in developing nations where 4G coverage isn’t universal, WhatsAapp’s update could make things even harder for the company, said Timothy Armoo, chief executive of Fanbytes.

Armoo said: "WhatsApp’s real market is in developing countries where it is relied on as a communication tool. It will now be able to roll out disappearing photos in countries that Snapchat has never been able to which could spell doom for them [Snapchat].

"This enforces the idea that Snap will never be as big as Facebook."

Jerry Daykin, global digital partner at Carat, put forward a theory that Facebook’s barrage of Snapchat-clone launches (17, says the Guardian), may not be solely a competitive move against Snapchat.

He said: "If I were to play devil’s advocate, the functionality could simply be seen as Facebook grappling with the same fundamental challenges affecting social media usage – hesitation towards the permanence of anything shared on a preserved newsfeed.

"Facebook’s trump card is its existing audience of over one billion people, whom it can role these new products out to instantly, though time will tell how many different ways of sharing their point-of-view consumers can truly juggle at once."

Will WhatsApp now host ads?

Historically, WhatsApp has actively pushed back any plans to carry advertising as it would clash with its core message of being a private space.

Daykin said: "Status will certainly create an environment in which advertising wouldn’t feel so out of place."

Upstone isn't so sure that this is the strategy Facebook aims to take though. He said: "Mark Zuckerberg hinted in November last year that it is exploring the use of artificial intelligence driven chatbots to bring businesses closer to its consumers.

"This follows similar a monetisation strategy to that of China’s WeChat, which has essentially become an mcommerce and payment platform, allowing users to ‘talk’ to brands and make purchases directly through the app." 

Chatbots would very likely prove a more steady stream of income than any monetisation of WhatsApp Status. Daykin criticised both Status and Instagram Stories as "not really designed as organic products for marketers".

He said: "In theory though, advertisers can drop in and out of the Stories game whenever they have a meaningful event to mark, but without the need to keep on pushing content."