Snap Takes Fight To Facebook Inc. (NASDAQ:FB) For Young American Users

Facebook Inc. (NASDAQ:FB) is facing its biggest test yet as competition for millennials in the social networking space continues to hit record highs. Unlike in the past where the networking giant had to worry about the threat posed by Twitter Inc. (NYSE:TWTR), Snap Inc. (NYSE:SNAP) is putting up a formidable fight for young American users to the concern of analysts.

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Snapchat Growing Popularity

A report by eMarketer has warned that the next generation of social media users may never join Facebook thanks to Snapchat’s growing popularity.  Such a move could see the world’s largest social media record it’s first-ever decline in usage.

A testament that Facebook is losing the race for young social media enthusiasts is the fact that its daily ad-reach on users between the ages of 13-24 currently stands at between 25 and 26 million users compared to Snapchat’s 26 million. EMarketer expects Facebook users aged between 12 and 17 to drop by 3.4% to 14.5 million slightly below Snapchat 15.8 million.

The findings if true should ring warning bells to Facebook given the kind of repercussions it could have especially on its lucrative advertising business.  Even though the gap between the networks appears to be small in terms of young users, advertisers are most likely to go with Snapchat when it comes to advertising campaigns.

 Facebook Edge

However, Snapchat still faces an uphill task to dethrone Facebook according to eMarketer analyst, Debra Aho Williamson. The giant networking is doing extremely well to offset any declines that might befall its popular app by focusing on Instagram which just like Snapchat, is popular with teenagers.  Instagram boasts of 22.1 million users between the ages of 18-24 compared to Snapchat’s 24.4 million.

“For teens and increasingly for young adults, Snapchat is a very, very sticky platform and one that they turn to again and again over the course of a day,” said Ms. Aho Williamson.

The fact that Snap relies on a single app for growth means Facebook will always have an upper hand when it comes to targeting people of all age groups.  However, the giant social network should also be worried given that losing an edge in the space could be detrimental to its long-term prospects.

Snap was down by 3.07% in Monday’s trading session to end the day at $13.58 a share.

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