Snapchat can't escape its ephemeral roots, and that may hamper user growth

Key Points
  • Snapchat now allows users to keep their posts online indefinitely.
  • Longer videos will help it garner more advertising dollars.
  • Yet comments from CEO Evan Spiegel and slowing growth suggest changing user behavior won't be easy.
Still in the early chapters of the Snap story: Expert
Still in the early chapters of the Snap story: Expert

reputation as an ephemeral sexting app may be hard to shake, based on comments made by CEO Evan Spiegel to Wall Street analysts this week.

And the habit among its original users to share only a little about themselves, only briefly and not with everyone, may act as a brake on revenue growth as the app looks to go mainstream.

Spiegel was asked several times on a conference call to discuss the company's disappointing first-quarter numbers and what Snapchat could do to add more users.

After first throwing shade on habit of pushing email notifications to users every time they're mentioned in a post, here's what he said in response to a question from Mark Mahaney of RBC Capital Markets:

"If we had just, in the beginning, encouraged Snapchatters to add all their friends in the contact book instead of just a few of them, they might feel really uncomfortable creating Snaps and adding them to their Story, because they wouldn't know who was actually watching."

That comment was lost a bit amid the buzz about his response to a later question about whether he was "afraid of Facebook."

But Spiegel's answer points to the tendency among the site's earliest users to keep sharing limited.

If enough of its users still feel that way, it could help explain why user growth has slowed.

While Snapchat's number of daily users surged 36 percent in the first quarter from a year earlier, the total climbed just 5 percent from the December quarter, disappointing investors.

That, along with a huge net loss and revenue that fell short of analyst estimates, helped pummel its shares on Thursday.

To attract more advertising dollars, Snapchat this week began allowing users to make their posts more permanent — rather than disappearing automatically after 10 seconds as has been the case.

Yet the company's growth trajectory suggests that changing how people use its app could take more than merely changing its features.

It could require a fundamental shift in the app's reputation.