Twitter and Snapchat Collaboration May Work as Facebook Defense

(Bloomberg Gadfly) -- A common enemy can be the foundation of a beautiful friendship. Snapchat and Twitter have a shared foe in Facebook, and to a lesser extent Google. And the two should find ways to join forces to connect their products and businesses to address their weaknesses. 

Broadly, each company has the same root problems: Their audiences are dwarfed by Facebook, and they're fighting for the scraps of advertising revenue left behind by Google and Facebook.

Facebook's 2.1 billion monthly users make Twitter's monthly audience of 330 million, and a roughly equal fan base for Snapchat's app , look meager by comparison. They're each trying to lure more new people to their shores and keep them around longer. 

Financially, Google and Facebook siphon two-thirds of the $83 billion worth of advertisements sold this year in the U.S. for the internet or mobile devices, according to eMarketer estimates. Everyone else, including Twitter Inc. and Snapchat, are in a scrum for the remaining slice.

That's a big shared headache. Here's how the two companies could team up to try to seek a cure: 

1) Share content selectively 

Snapchat fans tend to love that video diaries they create disappear after 24 hours. There's less pressure to craft perfect moments for posterity. But disappearing videos are not great for self-made digital video stars that are trying to attract fans on Snapchat. That goes double for media companies such as NBC that are creating customized news or entertainment programs for Snapchat. 

Imagine if Snapchat and Twitter collaborate on a "share to Twitter" option within Snap Inc.'s app. Then media organizations and digital video celebrities would be able to pick some of their work to live on Twitter after a one-day exclusive on Snapchat. The option for a larger audience when they want it might draw more digital media celebrities or entertainment companies to focus on creating Snapchat programs. 

Adding more videos is good for Twitter, too, which is busy striking arrangements with partners to air live video shows, concerts and sports. Among those partners is Bloomberg LP, the parent of Bloomberg News, which is developing a global breaking news network for the Twitter service.

Distributing select Snapchat programming would give Twitter a new lure, and a good chunk of those folks wouldn't have seen the video on Snapchat first. Pew Research Center found 36 percent of survey respondents who use Snapchat for news also get news from Twitter. Re-purposing programming is a way for Snapchat and Twitter to each potentially reach people who otherwise wouldn't come through their doors. 

2) Sell advertising jointly

What I'm suggesting is Snapchat and Twitter could pool some of their advertising slots, and sell packages of ads that appear on both Twitter and Snapchat. A company that's trying to reach twentysomething men, for example, might love to buy commercial time on Twitter's upcoming sports web video program, plus purchase ads that would appear to men who use Snapchat. 

I will say that these types of pooled business arrangements, particularly in advertising sales, are very tricky. The newspaper industry is full of horror stories

3) Fill in geographic holes

Investors and other outsiders have suggested Snapchat should create a stripped-down app for countries such as India or Nigeria. CEO Evan Spiegel has resisted that notion, both because Snapchat's app isn't the same without all the features that are tricky in countries with poor mobile internet connections, and because total ad spending in those countries is too small to justify Snapchat's entry. 

Twitter, though, is a relative globetrotter. About 80 percent of Twitter's users are outside the U.S., compared with the 43 percent of Snapchat users that are in North America. If Snapchat programs appear on Twitter, it could give people a taste of Snapchat in much of the world where its app is absent, without the need for Snapchat to spend more to expand globally right now. Twitter gains by adding something alluring to convince bigger numbers in its home country to drop by out of curiosity, and hopefully stick around. 

Teaming up for an anti-Facebook coalition doesn't fix all that ails Snapchat and Twitter. But the companies' paths are starting to look uncomfortably familiar. Snapchat's rocky road in its first nine months as a public company has some echoes to Twitter's rocky road since its initial public offering in 2013. It's scary out there for each company on its own. A buddy system is worth trying. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.

1. Analysts have estimated Snapchat has roughly the same number of monthly users as Twitter, but it's tough to know for sure. Snapchat only discloses the average number of its daily users, while Twitter only discloses the number of people who use its service at least once a month.

To contact the author of this story: Shira Ovide in New York at sovide@bloomberg.net.

To contact the editor responsible for this story: Daniel Moss at dmoss@bloomberg.net.

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