Snap Collaborates With Jeff Koons, Ramps Up AR Platform

Snap Inc. (NYSE:SNAP) recently joined hands with artist Jeff Koons to unveil a new art platform that uses augmented reality (AR). The platform allows users to view art installations held in specific locations and provides them with proper directions.

Reportedly, this new initiative will initially feature art installations in the United States, Canada, the U.K., Paris, Australia and Brazil, with more global locations to be added eventually. Apart from Jeff Koons, the company is also welcoming other artists to share their art onto the platform.

Per Variety, the platform currently features Koons’ famous Balloon Dog, Swan, Rabbit, Popeye, and Play-doh sculptures. TechCrunch, citing a source, mentioned that the company’s acquisition of Israel-based Cimagine in December helped it bring this AR feature to the platform.

Moreover, Snapchat also has a similar kind of feature called geofilters, launched in 2014. These are location tags that can be superimposed on photos and video posts.

Will the Efforts be Beneficial?

The company has been facing severe competition from Facebook’s (NASDAQ:FB) Instagram which has 800 million users. Further, Instagram Stories, a blatant copy of Snapchat’s feature of the same name, was recently reported to have crossed 250 million users, substantially outperforming Snapchat’s 173 million.

Notably, shares of Snap have declined 40.2% of its value since its listing date of Mar 2, 2017, as against 8.2% growth of its industry.

Snap is striving hard to boost user base and win over investors’ confidence by continuous addition of new features.

Snap, in a bid to expand augmented reality, introduced “World Lenses” in April 2017. The feature allows users to superimpose special effects on the photos or videos. Recently, Snapchat also rolled out 3D Bitmoji World Lenses, which users can access through the rear facing Snapchat camera and superimpose it on their posts.

Snap is also aggressively ramping up its original content efforts in a bid to attract new subscribers and survive tough competition from established players like Netflix (NASDAQ:NFLX) , Amazon (NASDAQ:AMZN) Prime, Hulu and HBO.

Further, research firm eMarketer has once again slashed the 2017 U.S. ad revenue estimates for Snap from $770 million to $642.5 million. The market research firm had earlier in March slashed the domestic ad revenue forecast from $805 million to $770 million.

We believe that with the latest addition of these features, Snapchat will be able to make its platform more attractive to users as well as advertisers. However, per TechCrunch, the latest feature is criticized for technical issues. The company therefore needs to work upon these glitches to ensure a steady flow of users and advertising revenues, in our view.

Currently, Snap has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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