Business
Snapchat is nearing 1 billion monthly users. Why can’t it turn a profit?
Snapchat, an app whose disappearing messages and silly face filters made chatting with loved ones more casual, is close to a milestone that few social media platforms achieve: reaching 1 billion monthly users.
But Snap, the Santa Monica company behind the app, faces a crucial test. The 14-year-old tech company is still losing money and has seen its share price tumble as it barrels forward to popularize augmented reality glasses next year.
And even though more people in developing countries are using the app, Snapchat usage in markets where the company makes more revenue per user, including the United States and Europe, has dropped.
Snapchat has 943 million monthly active users globally, according to the company.
Growth in India, where TikTok is banned, and Pakistan have fueled Snapchat’s global user growth, data from market intelligence firm Sensor Tower show. In India, Snapchat monthly users have surpassed 250 million, making up more than a quarter of its user base, according to numbers Snap released in July.
At the same time, in the third quarter, Snapchat monthly active users declined by 4% in the U.S. and double digits in France, Italy, Germany and the United Kingdom, Sensor Tower said.
Snap Chief Executive Evan Spiegel wrote in a September note to employees the company is in a “crucible moment,” comparing it to a “middle child” wedged between larger tech giants and smaller rivals.
“This moment isn’t just about survival,” Spiegel wrote in the note. “It’s about proving that a different way of building technology, one that deepens friendships and inspires creativity, can succeed in a world that often rewards the opposite.”
The 35-year-old tech executive co-founded Snapchat — initially known as Picaboo — in 2011 with friends as part of a class project while attending Stanford University. Back then, texts and photos posted on social media such as Facebook and Instagram were more permanent.
Snapchat’s logo is a ghost and the app distinguished itself from its competitors by giving people a way to share photos and messages that disappeared once someone viewed it. Instead of a social media app that opens to a feed of content, Snapchat opens to a camera.
Rather than worry about whether they looked perfect, people leaned into quirky and creative ways to express themselves. They overlaid effects onto their selfies, transforming their faces into cute dogs and even puking rainbows. The app encouraged people to keep sending these disappearing messages known as “Snaps” to their loved ones at least once a day, keeping what’s known as a “streak” alive.
As Snapchat’s popularity soared, fueling the rise of vertical videos, bigger social media rivals took notice. Snapchat’s co-founders turned down Facebook’s multibillion-dollar offer to buy the company.
Facebook and its photo-sharing app Instagram copied Snapchat’s signature features including Stories, which allowed people to post images and videos that vanish after 24 hours. This prompted some Snapchat users to flock to its rival Instagram. Spiegel jokingly titled himself as the vice president of product at Meta, Facebook’s parent company, on LinkedIn, a nod to the social media giant’s cloning of Snapchat’s features.
Although Snapchat set itself apart from other social media, it also faced similar concerns tech platforms grappled with such as child safety and mental health. The app is popular among teenagers, prompting some users to question if they’re too old for Snapchat and should leave.
Alex Sirek started using Snapchat as a teen to chat and make plans with her friends, filling the app with high school and college memories.
But as she grew up, she realized there were downsides to being on the app. She constantly opened Snapchat to check her face, which made her feel bad about her skin. When friends posted about partying or going out, she felt the fear of missing out.
Last year, looking to free up storage on her smartphone, Sirek deleted Snapchat.
After about a year, the 24-year-old San Diego fitness influencer downloaded Snapchat again but rarely uses the app.
“I kept wanting to open it, but now I just don’t even think about it,” she said. “I forget that I have it on my phone.”
Investor confidence in the company has plummeted. In 2021, Snap’s stock peaked at more than $83 per share. Snap’s share price closed Tuesday at $7.64.
Competing with larger rivals such as Instagram, Facebook, YouTube and TikTok, for ad dollars has been challenging for Snapchat and it has struggled to consistently turn a profit. Apple’s privacy feature made it tougher for advertisers to track users across apps and websites, posing an extra hurdle for social networks.
Research firm eMarketer estimates that in 2025 Snapchat will claim 2.1% of U.S. social network ad spending, but said that share is dropping.
Snapchat’s initial focus on disappearing messages made it tougher for the company to rope in advertisers because people typically don’t want to see ads in the middle of a private conversation. But the company has been updating its ad tools and expanded the places where ads are shown, including between short videos.
Although Snapchat is popular among Gen Z and millennials, its audience might limit what businesses want to advertise on its platform.
“It definitely skews a lot younger and that naturally sort of limits advertiser interests in its audience,” said Max Willens, a senior analyst at eMarketer. If a business wants to advertise retirement planning, for example, they would probably go to Facebook instead of Snapchat.
On Snapchat, advertisers have also used augmented reality effects to promote their brands in quirky ways to a young audience. Snapchat users can transform themselves into a dancing McDonald’s McRib sandwich or snap selfies with digital animals from the Disney film “Zootopia 2.”
Snap has been looking at other ways to make money. The company offers subscription plans so users can customize the app’s wallpaper, personalize their digital avatars known as Bitmojis and see how often their friends view their content. It started to limit the amount of free storage it offers to 5 gigabytes. AI company Perplexity said it will pay Snap $400 million over one year so users can find answers from its “AI-powered answer engine.”
In the third quarter, Snap revenue reached $1.5 billion, up 10% compared with the same period last year. The company narrowed its net loss to $104 million, versus a net loss of $153 million during the year-earlier period.
This month, JP Morgan analysts raised Snap’s price target to $8 after the Perplexity deal but kept an underweight rating on the shares, meaning they expect the stock to underperform.
The firm said Snap has “a sizable market opportunity, an engaged user base, and a solid track record of innovation” but it’s also looking for “more consistent execution, improved user & revenue trends, & greater profitability.”
Snap has made bold and expensive bets on the future of computing by releasing a drone and glasses to capture photos and videos — though those products flopped. Now Snap plans to release augmented reality glasses in 2026 that let people interact with digital images overlaid onto the physical world. Instead of taking out your phone, people will be able to review documents, stream movies, play chess and more through glasses.
For now, analysts say it’s too early to tell if Snap’s bets will pay off or the company will end up in the social media graveyard like Myspace or Vine.
“There’s nothing written down that says you just get to be around forever if you’re a social media platform,” Willens said. “Although almost all of those still kind of trudge along in some state or another.”
Business
Waymo reports teen riders for bad behavior and delivers them to the police
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
Business
Orange County real estate investor pleads not guilty in $100 million bank fraud case
An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.
Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.
He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.
Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.
Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.
A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.
Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.
In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Prosecutors sought to hold Makhijani without bail after his arrest.
The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.
The request was denied and he was granted $500,000 bail.
However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.
The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.
Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.
The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.
Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
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