Investors convinced Snapchat can compete with Instagram

An increasing growth in users and revenue has given Snapchat's investors the believe that the social media platform can survive competition from Facebook's Instagram, after enthusiasm faded after the company's IPO last.
Daily usage rose from 178 to 187 million in its latest quarter despite analysts expectation of 184.2 million users. The firm said after bugs in the android version of its app, user were staying longer with advertisers to its advertising system that made it cheaper and easier to buy ads.

An 18 percent rise from last year's daily active users meant a reverse in the slow growth trend. Investors are hoping the user growth can be translated into advertising revenue, which experienced a 72 percent rise to $285 .7 million, exceeding expectations of $253.2 million.

Incorporating features like filters and stories, Instagram threatened to eliminate snapchat, with the active daily users of snapchats figure but analysts snapchat are not been distracted by Instagram. 

“They are going to continue to be competitors, and Snap is doing a creditable job of competing for revenue,” analyst Michael Pachter of Wedbush Securities said.

Snapchat are pushing towards advertising market which Facebook and Google dominates and together controls half the market share but small business are doubling the revenue its generate for snapchat.

“We know that in order to truly scale our business, advertising on Snapchat has to be really easy,” Khan 

The company also redesigned its interface to make it easier to use and the new version would be launched in it's first quarter according to Chief Executive Evan Spiegl. With Snapchat main base being millennials, Spiegel said: “We believe that the redesign has also made our application simpler and easier to use, especially for older users.”

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