Snapchat Must Either Grow Up or Risk Disappearing

Los Angeles had an unseasonably warm winter followed by an even drier spring. This year's fire season wasn't much of one, insomuch as the fact it never really ended. Everyone who lives here knows these record-breaking heat waves fueled by the Santa Ana winds are just the beginning. Summer is coming.

Weather has a way of putting things in perspective. Snapchat may not see the connection yet, but for a company that calls the Venice neighborhood of this city home, the changing climate cannot be ignored. Even though the heat began to wane outside last month, Snapchat is still sweating.

The remainder of 2014 will be a defining one for Snapchat and certainly it's most challenging thus far. How the company reacts to recent moves from Apple and Facebook, and overcomes its privacy issues with regulators and consumer advocates will be an important test.

May was an especially rough month for Snapchat, but it didn't start out that way.

Taking Hits on Privacy From the FTC and EFF

The company reached an agreement with the U.S. Federal Trade Commission to settle charges it had deceived consumers over the amount of data it collects on users and made false promises about the disappearance of messages sent through its app. Under the terms of the settlement, Snapchat is now "prohibited from misrepresenting the extent to which it maintains the privacy, security, or confidentiality of users' information." Snapchat is also required to implement a privacy program that will be monitored by an independent privacy professional for the next 20 years.

"If a company markets privacy and security as key selling points in pitching its service to consumers, it is critical that it keep those promises," FTC Chairwoman Edith Ramirez writes in the agency's announcement. "Any company that makes misrepresentations to consumers about its privacy and security practices risks FTC action."

Before the ink even dried on its settlement with the FTC, Snapchat was in hot water again, this time with the Electronic Frontier Foundation (EFF). The non-profit committed to defending civil liberties in the digital age scored Snapchat at the bottom of the pack in its annual review of technology and communications firms titled " Who Has Your Back?

Snapchat earned recognition in only one of the six criteria measured by the organization. "This is particularly troubling because Snapchat collects extremely sensitive user data, including potentially compromising photographs of users. Given the large number of users and non-users whose photos end up on Snapchat, Snapchat should publicly commit to requiring a warrant before turning over the content of its users' communications to law enforcement. We urge them to change course," the EFF writes in the report.

Snapchat was also called out for declining to publicly oppose mass surveillance and for not keeping pace with industry competitors when it comes to "transparency around data requests, giving users notice when their data is sought by the government, or requiring a warrant for user content."

Without an overwhelming faith in Snapchat's adherence to privacy, the entire value proposition for its app will reverse dramatically. The company took at least one right step in that direction when it updated its privacy policy just days before reaching agreement with the FTC.

In it Snapchat reiterates that all messages are deleted from its servers once all recipients have viewed them, but it doesn't hide from the fact that there are still ways to access and even save those messages after they are deleted:

"We take reasonable measures to help protect information about you from loss, theft, misuse and unauthorized access, disclosure, alteration and destruction," the company adds. But here's the real kicker, one sentence that does Snapchat no favors other than to protect itself from legal and future regulatory snafus: "You should not use Snapchat to send messages if you want to be certain that the recipient cannot keep a copy."

Theses updated privacy policies may appease bureaucrats, but Snapchat has a long way to go before it can say the same for users and consumer advocates who are already losing faith in the company. This, above all else, could be Snapchat's ultimate demise. But are things really as bad as they appear?

Not according to a recent report from Sandvine. The networking equipment provider concludes: "Snapchat has become the leading third-party messaging service by volume, generating more traffic each day than competing services such as WhatsApp" in North America. That's a lot of snaps.

To maintain that lead, Snapchat needs to take a more public and clear stance on the privacy of those snaps. Every resource at its disposal should be put toward the development of Snapchat's core feature. Are these disappearing messages just an act?

If there are any specific technological hurdles to rectifying this issue, Snapchat needs to come out and say it. Explain to users how hard it is to ensure that snaps only live for 10 seconds. Otherwise, users will continue to question Snapchat's true commitment and intent. Why can't Snapchat stand behind its promises?

Leaked Emails Fuel the Fire

Just as things seemed to cool down for Snapchat, a series of damning and misogynistic emails penned by co-founder and CEO Evan Spiegel five years ago were obtained and published by Valleywag.

Much of what he wrote during his fraternity days at Stanford University doesn't bear worth repeating; just suffice to say that Spiegel says he is "mortified and embarrassed" over the "idiotic emails." He concluded his brief, prepared statement with an apology, adding that he was a "jerk" to have written the emails and that "they in no way reflect who I am today or my views towards women."

While some are giving Spiegel a pass, especially those within the Silicon Valley echo chamber, others are chastising the 24-year-old for not being more forthright in his apology. Many executives have come back from much worse, but consider how differently things have played out recently for other men of privilege caught making discriminatory comments in private conversations.

In the ultimate twist of irony, perhaps this breach of Spiegel's privacy will embolden him to make Snapchat the most private and secure messaging platform of all. That wouldn't necessarily insulate him from this controversy, but it would give him a cause and a personal story to bring it all full circle. America loves a comeback and this could be his.

Vultures Circle Overhead

As if Snapchat didn't have enough problems to deal with, all of which it brought on itself; the company is quickly approaching its most competitive threat yet. And it's coming from two of the most powerful companies in the world -- Apple and Facebook. The latter hasn't made any formal announcements, but according to the Financial Times, it is developing a video-messaging app known internally as "Slingshot" to rival Snapchat.

Rumors and unannounced products are one worry for Snapchat, but the threat from Apple is real and coming this fall. During the company's annual developer's conference, Apple announced plans to incorporate Snapchat's core feature directly into its messages app. When iOS 8 is released, users will be able to send video, photo or audio messages that self-destruct.

At that point, what will keep iOS users from consolidating all of their ephemeral messaging behavior within Apple's most popular app? It all comes down to trust, user experience and privacy.

If Snapchat stands any chance of deflecting this colossal threat from Apple (and possibly Facebook), it has to completely change the script and grow up fast. Unseemly emails and privacy concerns are problems that Snapchat can't afford to have at a time when it must gear up for battle with the heavyweights to its north.

How many more heat waves can Snapchat sustain? By the time winter arrives, we should know the answer. If it's still licking its wounds then, Spiegel and company may deeply regret their decision to not sell to Facebook, Google and others that were circling around with multi-billion dollar offers late last year.

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