Snapchat aims to fetch ad dollars with young users in Corona crisis

Today's fun filters, which let people give themselves cat whiskers, for example, could also be used by cosmetics companies to let users try beauty products virtually, said founder and chief executive Evan Spiegel.

Snapchat is especially popular with younger people and sees that as a strength. They are "consumers of the future who still provide significant value to advertisers over their lifetimes and are only beginning to build loyalty to specific brands," top executive Jeremi Gorman said in a conference call with analysts after presenting recent quarterly results on Tuesday.

Snapchat recently reached 229 million daily active users, which was 11 million more than at the end of 2019. In addition, they spent a fifth more time in the app at the end of March than at the end of January, as Spiegel pointed out. The communication functions were even used around 30 percent more, he said. For the current quarter, Snapchat expects 239 million daily users.

Huge loss despite higher sales

The Corona crisis is making companies keep their money together - and therein lies a big risk for online platforms like Facebook and Snapchat, which rely on advertising spending. Snapchat operator Snap still reported a strong increase in revenue of 44 percent to $462 million for the first quarter.

In the current quarter, things are looking less rosy: In April, the increase first melted down to 15 percent and then to 11 percent. But Snap is confident: "Advertisers are trying to get more out of every dollar spent - and we have efficient pricing," Gorman said.

However, Snap has recently remained deep in the red: In the first quarter, there was a loss of around 306 million dollars - after a minus of a good 310 million in the same quarter last year. Investors nevertheless preferred to focus on the opportunities presented by the crisis: Snap shares rose by around a fifth in pre-market trading on Wednesday. (SDA)