Snap (NYSE:SNAP) shares dropped sharply Tuesday after Facebook's (NASDAQ:FB) photo-sharing app Instagram rolled out new features. The social-media giant does not play by the rules when it comes to fighting rivals and on Tuesday, it officially introduced another feature that is a clone of what Snapchat is already offering.
Is Being A Copycat Part Of Facebook’s Strategy?
Instagram Direct enables users to message disappearing videos and photos in the same individualized chat section which was reserved for re-shares and texts previously. Disappearing messages are the trademark features of Snapchat. Users will also be notified if the viewer takes a screenshot as well, which is another Snapchat-like feature.
Instagram’s new feature addresses one of the main reasons some users hesitate to post Instagram Stories. People who have millions of followers often hesitate to share a small raw video with strangers, notes Barron’s. Now, with this new feature, they will be able to share the video individually or in a group of close friends.
Currently, Instagram Direct has 375 million users, and it is aiming to increase its user base with new features, whether or not those features are new copycats. The Information argues that such copycat behavior is part of Facebook’s strategy to take down rivals by cloning their most popular features, and it is believed that the company doesn’t hide its tactics internally.
The stock of Snapchat’s parent company, which was already down more than 6% in the past month, closed down at $20.70 a share on Tuesday, dropping another 1% after Instagram rolled out the new feature.
In March when Facebook disclosed another new feature similar to Snapchat, Snap’s stock dropped by around 1%. Following this, Jefferies reiterated its Buy rating on Snap, claiming that the photo-sharing app continues to beat the social media giant in new features.
“We see the roll out of clone features in Instagram and now core Facebook as a sign that Snap is creating the best and most engaging tool sets,” Jefferies said.
Facebook's Habit Of Copying Snapchat’s Features
For many years now, Facebook, which is headed by CEO Mark Zuckerberg, has been trying to steal the users and popularity of Snap, which was founded by Evan Spiegel. Snap’s shares went down last month as well after a Jefferies analyst said that Facebook will continue to chase Snapchat’s innovation.
The Facebook-owned app has replicated many features of Snapchat. Previously, Facebook disclosed clear copycats of Snapchat Snaps, Snapchat Stories and Snapchat Filters. However, the social networking giant has never admitted that it took its camera ideas from the popular photo-sharing application, notes CNBC.
In comparison to Instagram’s 600 million users, Snapchat has only 158 million users, according to its IPO filing. There are good chances that Instagram, which Facebook acquired for $1 billion, will prove to be its most lethal weapon in destroying another company it tried to buy (Snap).
On Tuesday, Facebook shares closed down 0.79% at $139.92. Year to date, the stock is up almost 22%, while in the last year, it is up more than 26%.