Snapchat

Investors are reacting positively to my last issue of Command Line, which broke the details of Snap’s internal business goals for next year.

The company’s stock price is up more than 11 percent today thanks to Snap’s “stretch” goal of reaching at least 475 million daily active users next year:

Bernstein analyst Mark Schilsky told Reuters that expectations from the stock are “incredibly low”, but he added, “even I have to admit that the stock would likely be materially higher if they hit this goal.”

That’s one of the things mentioned during the ongoing testimony of former Alameda Research CEO Caroline Ellison against her terrible ex-boyfriend, as well as the idea SBF sought to have regulators “crack down on Binance,” the competing crypto exchange that sparked the run that took FTX down.

You can expect more updates from Wednesday’s events in the Sam Bankman-Fried / FTX fraud trial to come later today.

“The [Information Commissioner’s Office’s] investigation provisionally found the risk assessment Snap conducted before it launched ‘My AI’ did not adequately assess the data protection risks posed by the generative AI technology, particularly to children,” according to the ICO’s notice.

The ICO notes that these are provisional findings, so there’s no enforcement yet or even a guarantee that one will happen. And the ICO says it will “carefully consider any representations from Snap before taking a final decision.”

“We are closely reviewing the ICO’s provisional decision,” Snap spokesperson Russ Caditz-Peck said in a statement. “Like the ICO, we are committed to protecting the privacy of our users. In line with our standard approach to product development, My AI went through a robust legal and privacy review process before being made publicly available. We will continue to work constructively with the ICO to ensure they’re comfortable with our risk assessment procedures.”

Snap launched the My AI chatbot to all users in April.

Update October 6th, 1:28PM ET: Added statement from Snap.

I’m hearing that about 150 employees are being cut as part of a reorganization of Snap’s AR division. Snap’s communications team declined to comment, though I’m expecting more details to be shared tomorrow.

For those who have been following Snap’s business lately, this news shouldn’t necessarily come as a surprise. Even after laying off 20 percent of employees in August 2022, Snap has yet to convince investors that it has the financial discipline to get to sustained profitability. These cuts don’t mean Snap is backing away from its AR strategy, however, I’m told.

Snap wanted to get 4 million people subscribed to its $3.99/month service by the end of 2022. Turns out, it probably happened about 6 months later. The last milestone Snap disclosed was hitting 3 million subscribers in April.

Super apps aren’t the only tech obsession that Silicon Valley can’t let go of; I guess the artist formerly known as Facebook still has money to burn on trying to make smart glasses happen. (RIP Google Glass, Project Iris. Thoughts and prayers to Snap Spectacles.)

Previously, only brands and Snap Stars could include links in their profiles, according to TechCrunch. Instagram also recently made it easier to link out to other places, letting you add up to five links to your profile.

Snap, Inc., the company that owns Snapchat, started beta-testing a revenue-sharing program last year called Snap Stars, where it injects ads into videos and splits the revenue with its creators.

Since April, it’s opened that program up to all eligible creators, and some creators are apparently doing quite well, according to The Wall Street Journal.

Adam Waheed, a creator with 12 million subscribers on YouTube, joined the program in February and said he now earns six figures a month posting on the platform.

Does this episode of The Vergecast feature several of the world’s best-known rappers? That depends on how you define “feature,” which turns out to be a pretty thorny question. This episode definitely features laser bongs and Snapchat bots, though. But not blue checkmarks or Netflix DVDs. None of those anymore.

Other than the My AI chatbot launch, the most interesting thing at Snap’s Partner Summit today was definitely the AR mirrors. The company thinks you might use it in a store to try stuff on, or just goof around while you wait for your friend to check out. It all seems very early, but pretty fun.

Also... AR vending machines are apparently a thing now.

A tidbit from the latest edition of my Command Line newsletter: Snap plans to unveil its AR-for-enterprise effort at its annual developer summit in April or possibly sooner, company sources tell me. The idea is for apparel brands to use Snap’s virtual try-on tech and 3D asset management to facilitate AR shopping on their sites.

This would be a totally new source of revenue for Snap, which needs to find more ways to make money if it wants to win back skeptical investors.

Snap just reported its earnings for the third quarter and the numbers are mostly in line with what Wall Street was expecting. Daily users reached 363 million, a 19 percent increase that is much better than growth rates for Facebook and Twitter. Revenue only grew 6 percent to $1.13 billion and Snap remains unprofitable.

Snap invented the Stories format but now it’s saying that users are engaging less with their friends’ Stories, which is a problem for its business since ads are placed between Stories. The company laid off 20 percent of its employees recently in an attempt to cut costs and get to profitability faster.