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.”

Lizzie Osorio remembers customers flooding Lion Boots in early May, browsing embroidered shoes and tasseled suede dresses.

Beyoncé had four concerts scheduled in Los Angeles at SoFi Stadium for her Cowboy Carter tour. So the store tucked in Santee Alley, where 24-year-old Osorio works selling cowboy boots and other Western-style clothing, was the perfect stop for fans.

Osorio expected, or perhaps hoped, the store would see similar traffic at the start of the Thanksgiving holiday week.

After the tumult of President Trump’s immigration crackdown, that remains to be seen. Over the summer, several raids in the neighborhood sparked protests. But the mass arrests and fears of deportation turned the Fashion District into a ghost town for several weeks after, with storefronts shuttered and frightened workers staying home.

The story was the same in other business districts that cater to immigrants. Although conditions have improved in recent months, merchants are still feeling the pain and in desperate need of a holiday retail miracle.

Local officials and activists are encouraging people to shop on Black Friday and beyond, including by holding a festival over the weekend. But it remains unclear how many will feel safe enough to come out.

Some merchants are “living sale to sale, customer to customer,” said Anthony Rodriguez, president of the Fashion District’s business improvement district, a private group of property owners in the area.

“These aren’t big-box stores,” Rodriguez said. “These are family-owned and, in some cases, generational businesses that more than ever need L.A.’s support. If people can come down and just spend $10 to $15 … that’s how we can make a difference.”

On Monday, Osorio said she made just one sale: a pair of utility boots.

She opened the store at 9:30 a.m. and sold the boots at around 2 p.m. They had been marked down $30 from their typical price of $160 because customers have been so reluctant to spend money, she said.

“We are waiting for the good times,” Osorio said. “Honestly, I felt like it was going to be better this week, but it’s been really, really slow. We just pray and keep the faith. Let’s see what happens.”

Small businesses in the area — which includes the historically vibrant, bustling open-air shopping corridor Santee Alley, known for bargain prices — are looking for ways to recoup some of their losses through holiday sales.

Shoppers stroll along Santee Alley in downtown’s Fashion District. More than half a dozen businesses in the alley and on Santee Street said their sales remained down after the onslaught of federal immigration raids, with some doing better than others.

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Foot traffic in the area is back at levels seen before federal immigration raids began in Los Angeles in early June, according to the business improvement district.

But Rodriguez said traffic fluctuates day to day and is “at the mercy” of rumors, at times false, of federal enforcement operations circulated among group chats of merchants and community members.

Such alerts prompt businesses to shut down at a moment’s notice with “people literally running from their stores,” Rodriguez said. He said that, one day, agents from the U.S. Fish and Wildlife Service were conducting an investigation in the area and were confused for Customs and Border Protection officers.

Rodriguez said there are “very valid reasons” to pay attention to alerts but that minimizing their harmful effects is crucial for economic recovery.

Visitors to stores and businesses in the Fashion District dropped dramatically in the week or so after the initial raids on June 6. Foot traffic in the Fashion District dropped 33% while visitors to Santee Alley specifically dropped by 50%, according to the business improvement district.

Rodriguez said it took at least three weeks to recover foot traffic, and even so, vendors are struggling because “people are not spending like they used to.”

And the typical holiday boost has yet to make an appearance, Rodriguez said.

“As of right now, we are not seeing the holiday spike we have seen in previous years,” he said.

In May, the Fashion District saw some 1.98 million visitors, while in June that number dropped to 1.2 million, according to the group. In September, the district saw 1.3 million visitors, far below the the 1.5 million the area saw in the same period last year.

Santee Alley in downtown’s Fashion District where business owners are working to recover from losses caused by recent immigration enforcement.

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Pop music blared from open doors on Monday afternoon on Santee Street as the light faded. A smattering of storefronts were closed, but most were open, ready to welcome tourists and local families doing their holiday shopping. Clumps of customers gathered. The alley was lively compared with the weeks after the first summer raids.

Maria Fuertes, 43, and her daughter had prowled the area for more than seven hours, since 9 a.m., shopping for outfits for a December wedding. They had made the more-than-hourlong trek from Eastvale in Riverside County to look for formal dresses and shoes. Fuertes said she often shops in the area around the holidays and that it “feels empty” compared to years past.

“It’s kind of creepy and lonely,” Fuertes said.

More than half a dozen businesses in the alley and on Santee Street told The Times their sales remained down after the onslaught of federal immigration raids, with some doing better than others. A lingerie shop saw a dip but not a severe one, with online sales remaining strong. The owner of an accessories store said business was down 30%, while an employee at a jewelry store said business was down 70%.

A local merchants association known as Somos los Callejones and the Los Angeles Tenants Union partnered with Councilmember Ysabel Jurado to host a street festival Saturday in an effort to attract customers in the lead-up to Black Friday.

According to Jurado’s office, the festival drew some 500 attendees. Vendors set up booths and racks of clothing along Olympic Boulevard between Santee Street and Maple Avenue, which was closed to vehicle traffic. The event featured live music, and organizers raffled off 10 turkeys.

Shoppers stroll along Maple Avenue in downtown’s Fashion District.

The raffling of turkeys highlighted the food insecurity many families in the area are facing, Jurado said in an interview. Some have lost their primary breadwinners to the Trump administration’s deportation efforts, and children have begun to skip school to keep their households afloat.

“Some were so excited to win [turkeys],” Jurado said, adding that the food insecurity “has been really sobering.”

“These are the realities that people are continuing to grapple with,” she said, “as their loved ones have been taken.”

Businesses said they were marketing deals when possible — and emphasizing customer service.

The California Mirage Jewelry Design Center, which is on prime real estate at the entrance to Santee Alley and has been in operation since the 1990s, has been offering 30% off on all items since last week, a promotion that will last through Black Friday.

Carolina Medrano, 38, a store employee who on Monday evening rearranged twinkling gold chains, said that even with the discount, business had been “super slow.”

“I believe everybody is struggling,” said Jessica Morales, 40, an employee at a nearby dress retailer who asked that the store not be named, since she didn’t have permission from her supervisor.

As she used a long pole with a hook to hang a glittery pink dress on a high rack, Morales noted that some customers had become more aggressive in trying to negotiate a lower price, threatening to go to other vendors.

She tries to emphasize the quality and variety of the store’s dresses, and that some other nearby retailers are no longer able to afford to keep their inventory well-stocked.

Some customers talk of quinceañeras being canceled, or their husbands telling them to stay home from parties for fears of raids, Morales said.

“People are trying to save their money. Everyone’s scared to come out,” Morales said. “You have to find a way to connect with customers.”

Women’s attire on display at the corner of Olympic Boulevard and Maple Avenue in downtown’s Fashion District where business owners are working to recover from losses caused by recent immigration enforcement.

The hit to sales in the aftermath of immigration raids comes as the local economy is already suffering, weakened by the rise of e-commerce, tourism disruptions from COVID-19 lockdowns and inflationary and other economic pressures pushing consumers to spend less.

Ilse Metchek, a former president of the California Fashion Assn. who has worked in the industry since the 1950s, said the merchandise sold in Santee Alley had changed in recent years. It shifted from the good-quality excess products of local brands — which were then sold at bargain prices — to imitation or cheap goods often imported from abroad.

Famously, Richard Riordan, who served as mayor of Los Angeles from 1993 to 2001, “took a very publicized walk [through Santee Alley] where he paid $10 for a silk shirt and made a whole big to-do about it,” Metchek said.

The move by then-President Reagan to grant amnesty, giving legal status and a path to citizenship to many immigrants lacking authorization, helped pave the way for a booming fashion economy, she said.

Immigration crackdowns in recent years, regulations that have increased labor costs and China’s manufacturing boom in the early 2000s have created a difficult economy for California fashion brands and workers.

“It’s a pity,” Metchek said. “There’s a clear pattern of why and what has happened here. This is not nuclear physics.”

Gloria Andrade, 53, owns a business selling makeup, accessories and miscellaneous electronics in the Maple Alley Fashion Center in downtown L.A. that has operated for some 25 years. In May, her family opened up a second storefront nearby in Santee Alley, without anticipating the raids and resulting downturn.

A view of the corner of Olympic Avenue and Santee Street in downtown’s Fashion District where business owners are working to recover from losses caused by recent immigration enforcement.

Andrade said the rent for her new location is about $4,500, and that she’s two months behind. Many neighboring businesses are in a similar situation, she said.

“It’s the first day of vacation and nobody came,” she said of the Thanksgiving holiday. “We’ll wait for Christmas to see how it goes.”

In a single week, collectors spent a whopping $2.2 billion on art at New York’s auction houses. While that $236 million Klimt portrait made headlines, plenty of other paintings and sculptures sold for sums that might surprise you.

Can you guess which of these works sold for more?

Note: Listed sale prices include auction fees.

Image credits: “Paradise Pies (VI): Red” via Sotheby’s; “Untitled” via Christie’s; “From our side” via Christie’s; “TAGOMIZOR” via Christie’s; “Blumenwiese (Blooming Meadow)” via Sotheby’s; “Waldabhang bei Unterach am Attersee (Forest Slope in Unterach on the Attersee)” via Sotheby’s; “Cowboy Eating with Shoulder Hole” via Sotheby’s; “Untitled (Cowboy)” via Christie’s; “A Clear Unspoken Granted Magic” via Christie’s; “Sarah” via Phillips; “Modern Painting Triptych II” via Sotheby’s; “Nude with Blue Hair, State I” via Christie’s; “Abstraktes Bild” via Christie’s; “Sunflower V” via Christie’s; “Wall Relief with Bird” via Christie’s; “Hulk (Rock)” via Sotheby’s; “America” via Sotheby’s; gold by MirageC via Getty Images.

Zachary Small contributed reporting. Produced by Josephine Sedgwick.