Prof G Markets: Twitter’s Rebrand to X, Mattel’s IP Playbook, and What’s Next for Snap

Financial Woes

Snap is currently grappling with significant financial challenges, marked by a second consecutive decline in quarterly sales. Scott Galloway highlights the competitive landscape, noting that Snap struggles against tech giants like Google and Meta, which dominate the digital ad market 1. Despite Snap's innovative platform and management, it remains subscale, unable to compete with these monopolies.

Snap is sort of, in my opinion, exhibit one for why we need to break big tech up.

--- Scott Galloway

The company's dependency on digital marketing spend, which has declined, further exacerbates its revenue concerns. However, there are bright spots, such as a 14% increase in daily active users, reaching 400 million 1.

   

Acquisition Outlook

Scott predicts that Snap's future may involve acquisition by a larger entity, given its subscale status. He suggests Disney as a potential buyer, which could leverage Snap's 400 million younger users to distribute its content and IP 2. This acquisition would align with Disney's strategy to counteract the decline in traditional distribution channels.

This feels to me like a company that should be part of a bigger company.

--- Scott Galloway

Alternatively, Apple could be a contender, although its non-acquisitive nature makes this less likely. Regardless, Scott believes that Snap's current state necessitates strategic changes within the next year 2.