SAN FRANCISCO – For years, people seemed to have an unlimited appetite for signing up for social media services. Now some of those companies may be hitting a wall to adding new users.
On Tuesday, Snap, the maker of the Snapchat app, said it lost 3 million daily active users in the second quarter from earlier this year. It was the first time since the company went public in early 2017 that it had reported a decline in users.
Snap’s report follows similar trends from Facebook and Twitter. Facebook revealed late last month that its number of users in the United States was flat from earlier this year and that its users in Europe had fallen over the same period, even though its total number of members had grown. And Twitter, which has struggled for years to increase interest in its platform, also said in late July that its monthly active users had decreased by 1 million from earlier this year. After those disclosures, share prices of both Facebook and Twitter tumbled.
The declines and flattening growth raise questions about whether the social media companies have reached a saturation point in some markets, especially in developed countries. That may have been compounded by a steady stream of bad news about social media in recent months, which may have also deterred users. Facebook and Twitter have grappled with the spread of misinformation and foreign interference on their sites, for example, while Facebook has also been dealing with the misuse of its members’ data.
Just this week, Facebook and Twitter were in the spotlight again for how they were handling misinformation spread by Alex Jones, the internet’s notorious conspiracy theorist. On Monday, Facebook removed four pages belonging to Jones for violating its policies by “glorifying violence,” among other things. Twitter said Jones’ accounts and that of his right-wing site, Infowars, did not violate its rules.
“There are limits to growth; the market cannot grow forever,” said Brian Wieser, an analyst at Pivotal Research. “The faster they’ve been growing in recent years, the sooner they were getting there.”
Snap, which began as a disappearing messaging app and has emphasized curation of content, has largely sidestepped some of the issues that Facebook and Twitter are facing. On Tuesday, the company disclosed the drop in users as it also posted a 49 percent jump in revenue to $262 million and a narrower net loss of $353 million for its second quarter from a year earlier.
But Tim Stone, Snap’s chief financial officer, cautioned that user numbers could continue to fall. He said Snap has historically experienced a dip in daily active users during the third quarter. He added that Snap’s 100 million monthly active users in the United States and Canada was “a noteworthy achievement for a company that is less than 7 years old.”