Snap Inc
Snap Inc. is a technology and social media company best known for its flagship product, Snapchat, which revolutionized the way users share content through features like disappearing messages, filters, and augmented reality lenses. Founded by Evan Spiegel, Bobby Murphy, and Reggie Brown after their collaboration at Stanford University, the company encountered early challenges, including a significant legal dispute with Brown. Snap Inc. made headlines when it went public in 2017, with its shares initially trading at $17 and closing at $24.48 on the first day, despite facing fluctuations in user growth and stock value afterwards.
Snapchat's unique appeal lies in its ephemeral nature and engaging features, which have attracted a predominantly young, female user base. The platform has adapted over time, introducing tools for advertisers and integrating user-generated content with features like Stories and Discover. However, Snap Inc. has also faced scrutiny over controversial filters and concerns regarding user safety, notably related to a speed filter linked to accidents. Despite these challenges, the company continues to explore new avenues for content and advertisement revenue, reaffirming its position in the competitive social media landscape alongside rivals like TikTok and Instagram.
On this Page
Subject Terms
Snap Inc.
Company information
- Date founded: 2011
- Industry: Technology, social media, camera
- Corporate headquarters: Santa Monica, California
- Type: Public
Snap Inc. is an American technology company founded in 2011. It is the parent company of Snapchat, the photo-sharing and messaging smartphone application that the company originally took as its name. Snapchat, which averaged more than 443 million daily users in 2024, is a significant source of revenue for the company, generating $4.6 billion in 2023. However, the company still recorded overall losses in the early and mid-2020s, although early predictions tapped Snapchat as a rival to Facebook, the latter was drawing over three billion monthly users in 2024.
The company was founded in 2011 by Evan Spiegel, Reggie Brown, and Bobby Murphy. The three were students at Stanford University. Brown reportedly had the idea to develop a social media app that allowed users to post photos and videos that would disappear within seconds. He and Spiegel recruited Murphy to write the code for an app they called Picaboo. They released it in July 2011. Spiegel and Murphy then forced Brown out of the company, renamed the app, and established a company they called Snapchat. The app became popular with high school and college students. Some used the app to cheat by sending classmates photos of tests—images that quickly disappeared, leaving no evidence. Snapchat has also reportedly been used to send lewd photos and videos.
In the 2020s, Spiegel served as chief executive officer (CEO) while Murphy chief technology officer (CTO). Derek Andersen was the company’s chief financial officer (CFO).
Snap Inc. is more than Snapchat, although the app remains its primary product. Snap Inc. offers other products and services as well. Among these is Spectacles, a pair of smart glasses also called a wearable camera that the company introduced in 2016. The glasses link to the wearer’s Snapchat account and can record videos.
History
Spiegel, Murphy, and Brown met around 2010 at Stanford University, where they were members of the Kappa Sigma fraternity. Spiegel was studying product design, Brown was majoring in English, and Murphy was studying mathematical and computational science. Spiegel and Murphy worked together on a tool for college admissions that went nowhere. Then Brown brought his idea to Spiegel, who shared it with Murphy. After they pushed Brown out, he sued them, settling for $157 million in 2014. Brown also designed the mascot named Ghostface Chillah which is used in the company logo.
About a year after the company launched, Mark Zuckerberg, CEO and founder of Facebook, made an offer of $60 million to Spiegel and Murphy. When they refused to sell their company, Facebook launched a new app that closely resembled Snapchat. The app, Poke, was not well received, and Facebook abandoned it in 2014.
Zuckerberg made another offer of $3 billion in cash for Snapchat. When it was rejected, he added many Snapchat-like features to Instagram, the photo and video-sharing social networking site Facebook had acquired in 2012. Stories proved to be popular, and Instagram’s success slowed Snapchat’s growth. This took place about the time when Snap Inc. went public in 2017. Shares started trading on the New York Stock Exchange on March 2 under the symbol SNAP priced at $17 a share. More than 200 million shares were traded, and it closed with an increase of 44 percent at $24.48 on the first day.
Spectacles dragged down the company’s value. The devices, which were priced at $130, generated some revenue in 2017 when they debuted but, according to Spiegel, only about 150,000 had been sold. In 2018, the company’s shares dropped below $5. User growth was sluggish as well. However, the average revenue per user (ARPU) continued to grow steadily. Fourth-quarter ARPU figures increased from $1.05 in 2016 to $3.44 in 2020.
Snapchat, the company’s flagship product, has multiple features, although initially, users had to work to find them because the app opened to the camera and the interface offered no clues as to what it could do beyond take and send photos. Updates offered users drawing and text tools and a variety of other features. Chat, the messaging feature, allows users to send messages to people they know—they must know the username of the recipient. The messages disappear after a few seconds. Filters allow users to overlay their photos with images or stickers. Among these are geofilters, which are available at locations such as iconic landmarks. This feature was added in 2014. Lenses was added in 2015 when the company acquired Looksery. Lenses is used to add playful elements to selfies, such as floral hair wreaths and cartoon animal ears. It is a form of augmented reality (AR) that brought many new users to Snapchat and created opportunities for advertisers. Users can link photos and short videos to create Stories. These likewise exist for a short time; the ephemeral nature of Stories encourages followers to frequently check profiles. Although Snapchat content is designed to disappear, users can use the Memories feature to save images and videos. Snap Map allows users to see what is happening near their location or find friends who are in the vicinity. Users can also view images shared by others at any location they select. The terms of service give Snapchat editors the right to share users’ images and videos in Live Stories. These give others a look at events or places.
Discover is a feature where news and entertainment companies share content. In the 2020s, Snap Inc. was devoting more effort to developing and promoting this content, which was driving revenue growth for the company.
Snap Inc. has developed other revenue-generating tools with advertisers as well. Many of these mesh with the whimsical nature of its products. For example, Taco Bell developed a Snapchat filter that gave users giant taco heads in selfies. Others have developed geofilters, such as a filter that works only when the user is in a company’s store. Advertisers can also create Stories or short video ads that appear during Live Stories. The Snap Store launched in 2018 and offered users Bitmoji merchandise.
Impact
Snap Inc.’s major product, Snapchat, revolutionized social media by popularizing filters, offering fanciful and interactive filters such as puppy ears and tongues. It also created the disappearing content feature, which was adopted by Instagram and Facebook. Spiegel has said that this feature appealed to young users because they were concerned about their social media actions coming back to haunt them.
Snapchat remained popular with teens and young adults through the 2020s. In the United States, 74 percent of teens said they used Snapchat once a month in 2024. TikTok, a social media product launched in 2016 by Chinese company ByteDance, has been encroaching on Snapchat’s digital territory. They were both popular with similar demographics: teens and young adults, the majority female. They also offered advertisers similar opportunities. Furthermore, many of the same celebrities and social media influencers were popular on both platforms. To encourage these individuals to continue creating video content on its platform, Snap Inc. announced that it would share advertising revenue with them.
Filters on Snapchat were among the most popular features of the flagship product but have also generated controversy. For example, a Bob Marley filter has been described as racially insensitive and a form of blackface. Stories emerged about racially biased corporate culture as well.
In 2013, Snapchat added a speed filter that captured how fast the user was moving. Multiple users were involved in car accidents, including fatalities. For example, three young women in Philadelphia were killed in 2015 in an accident linked to the speed filter. Three young men in Wisconsin recorded a speed of 123 miles (198 kilometers) per hour with the filter in 2017; they died when the car crashed into a tree. Families of many individuals killed or injured in these crashes sued the company, saying it encouraged young people to speed. Some lawsuits cited the app’s Trophies, which are emojis users get for performing some activities, such as sending a snap between four and five o’clock in the morning or sending a snap with the temperature filter below freezing. Snap Inc. changed the filter to a sticker, which made it less noticeable, and added a warning, “Don’t Snap and Drive.” The driving speed for a post using the sticker was limited to 35 miles per hour. Publicly the company stated that the safety of users was an important priority.
In 2021, the company announced that it was removing the filter because it was not popular with Snapchatters, as it called its consumers. In 2022, Snap Inc. reduced its workforce by 20 percent, and in 2024, it downsized by another 20 percent. Stock prices fell in 2024 as the company's revenue fell short of expectations. Also in 2024, Snap Inc. settled a lawsuit with the California Civil Rights Department for $15 million following many instances of gender discrimination between 2014 and 2024.
Bibliography
Allyn, Bobby. “Snapchat Can Be Sued Over Role in Fatal Car Crash, Court Rules.” National Public Radio, 4 May 2021, www.npr.org/2021/05/04/993579600/snapchat-can-be-sued-for-role-in-fatal-car-crash-court-rules. Accessed 20 Jan. 2025.
Bell, K. “Snap Unveils All-New Spectacles with Built-In Augmented Reality.” Engadget, 20 May 2021, www.engadget.com/snapchat-spectacles-augmented-reality-180101040.html. Accessed 20 Jan. 2025.
Benner, Katie. “How Snapchat Is Shaping Social Media.” The New York Times, 30 Nov. 2016, www.nytimes.com/2016/11/30/technology/how-snapchat-works.html. Accessed 20 Jan. 2025.
"Civil Rights Department Obtains $15 Million Settlement Agreement with Snapchat Over Alleged Sex-Based Employment Discrimination." Civil Rights Department, State of California, 19 June 2024, calcivilrights.ca.gov/2024/06/19/civil-rights-department-obtains-15-million-settlement-agreement-with-snapchat-over-alleged-sex-based-employment-discrimination. Accessed 20 Jan. 2025.
Hutchinson, Andrew. “Snapchat Shares New Insights into Gen Z Consumption and Engagement Trends.” Social Media Today, 18 Feb. 2021, www.socialmediatoday.com/news/snapchat-shares-new-insights-into-gen-z-consumption-and-engagement-trends. Accessed 20 Jan. 2025.
McLachlan, Stacey. “16 Snapchat Demographics for Marketers to Know in 2024.” Hootsuite Blog, 9 Apr. 2024, blog.hootsuite.com/snapchat-demographics. Accessed 20 Jan. 2025.
Iqbal, Mansoor. “Snapchat Revenue and Usage Statistics (2025).” Business of Apps, 22 Jan. 2025, www.businessofapps.com/data/snapchat-statistics. Accessed 20 Jan. 2025.
Levy, Adam. “TikTok Became a Bigger Threat to Snapchat in 2020.” The Motley Fool, 28 Jan. 2021, www.fool.com/investing/2021/01/28/tiktok-became-a-bigger-threat-to-snapchat-in-2020. Accessed 20 Jan. 2025.
Nusca, Andrew. “Snapchat: An Abridged History.” Fortune, 4 Feb. 2017, fortune.com/2017/02/04/snapchat-abridged-history. Accessed 20 Jan. 2025.
O’Connell, Brian. “History of Snapchat: Timeline and Facts.” The Street, 28 Feb. 2020, www.thestreet.com/technology/history-of-snapchat. Accessed 20 Jan. 2025.
Routley, Nick. “Timeline: Looking Back at 10 Years of Snapchat.” Visual Capitalist, 18 July 2021, www.visualcapitalist.com/timeline-looking-back-at-10-years-of-snapchat. Accessed 20 Jan. 2025.
“Snap Inc. - Snap Inc. Announces Fourth Quarter and Full Year 2022 Financial Results.” Snap Inc. - Investor Relations, 31 Jan. 2023, investor.snap.com/news/news-details/2023/Snap-Inc.-Announces-Fourth-Quarter-and-Full-Year-2022-Financial-Results/default.aspx. Accessed 20 Jan. 2025.