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Snapchat is nearing 1 billion monthly users. Why can’t it turn a profit?

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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.

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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.

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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.

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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.

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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.

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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.”

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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.”

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Rent-hike ban to protect fire victims ends despite gouging concerns

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Rent-hike ban to protect fire victims ends despite gouging concerns

A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.

The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.

The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.

“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”

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Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.

It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.

Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.

“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.

Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.

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“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”

Mitchell did not immediately respond to a request for comment.

There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.

In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.

In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.

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A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”

“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.

Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.

L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.

Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.

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Newsom defended the price-gouging protections shortly after they went into effect.

“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”

The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.

“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.

Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.

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Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.

The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.

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Read Nick Bilton’s Letter to Scott Pelley

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Read Nick Bilton’s Letter to Scott Pelley

Dear Mr. Pelley:

I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.

Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.

Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.

Sincerely,

Nick Bilton

Executive Producer, 60 Minutes

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Aspiration co-founder sentenced to 14 years for fraud

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Aspiration co-founder sentenced to 14 years for fraud

The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.

The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.

Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.

Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.

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Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.

In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.

The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.

Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.

The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.

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The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.

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