Snap Inc. (NYSE: SNAP) plunged over 15.31% in pre trading session on Wednesday as the firm attributed its lackluster quarterly profitability on the weak economy and heightened competition, but analysts suggested on Wednesday that an improvement in the key ad indicator would be good news for Facebook owner Meta Platforms and Alphabet.

According to Snap, its direct response business, which promotes product sales or website visits, increased 4% from October to December. However, brand advertising revenue, which is meant to enhance a brand’s reputation, declined 11%, the business reported in its quarterly results report on Tuesday. According to Mark Shmulik, senior analyst at research company Bernstein, that might “be considered as a favorable indicator for Meta and Google,” whose businesses are geared toward direct response advertising.

Because brands view advertisements on Alphabet’s (NASDAQ: GOOGL) Google searches as essential to generating website visits or other customer behaviors, Google has historically performed better than other ad-dependent businesses. Similar to this, Meta (NASDAQ: META) has previously said that direct response advertising accounts for the majority of its earnings. Due to their massive user bases, Facebook and Instagram have become integral parts of many firms’ marketing strategy.

According to Evercore ISI analyst Mark Mahaney, “Snap is hurt by the fact that it has considerable brand advertising exposure (which is being struck harder than direct response).” He went on to say that Meta and Google could see noticeably less of a headwind.

After Snap predicted a 10% fall in current-quarter sales, its shares fell 14% on Tuesday. On Wednesday, the shares continued to decline, plunging around 15% before market open. On Tuesday, the bleak prognosis drove down the price of competing companies Meta, Google, and Pinterest, which also generates income by selling digital advertising. According to Refinitiv, analysts anticipate Meta to post a 6.5% reduction in sales for the December quarter, marking the third straight quarter of loss.

Spotify Technology SA (NYSE: SPOT) Predicts 500M People Will Be Listening To Audio Content

Spotify Technology SA (NYSE: SPOT) rose over 12.72% in pre trading session on Wednesday as the company predicted 500 million people will be listening to audio content by the end of the next quarter when it released fourth-quarter earnings on Tuesday that exceeded forecasts for both active users and subscriptions. In the quarter, there were 489 million monthly active users, above both Spotify’s estimates and analysts’ expectations of 477.9 million.

According to IBES statistics from Refinitiv, the number of premium subscribers, which provide the majority of the company’s revenue, rose 14% to 205 million, above predictions of 202.3 million. Marketing initiatives and the increase in listener sign-ups in nations like India and Indonesia were the main drivers of the rise.

Along with expecting half a billion users, Spotify anticipates 207 million premium customers and $3.35 billion in income for the current quarter. Analysts anticipated 3.05 billion euros in sales and 202 million members.

The business anticipates that starting in 2023, revenue will start to expand more quickly than operational expenses, which have increased as a result of rising staff and greater advertising costs.

Match Group Inc. (NASDAQ: MTCH) Works To Recover From Current Outbreak

The maker of the popular dating app, Match Group Inc. (NASDAQ: MTCH) plummeted over 9.18% to $49.12 in pre trading session on Wednesday as it works to recover from the current outbreak, it is preparing to slash spending and staff. The depressing prognosis for the owner of dating apps like Tinder, Hinge, and OkCupid comes at the conclusion of a difficult year. The company encountered difficulty with international sales because to a high dollar in 2022, a change in the chief executive officer, and the implications of Covid-19 restrictions. Due to these problems, its shares plunged roughly 70% last year, giving it the second-worst performance in the S&P 500.

The year’s final three months were challenging. Sales in the fourth quarter decreased by 2.5% to $786 million, and there were 16.1 million paying customers during that time, a decrease of 1%. Last May, former Zynga Inc. president Bernard Kim succeeded outgoing CEO Shar Dubey in her position. Match has begun experimenting with different types of monetization, including a more costly version of Hinge and its main app Tinder, in the months after Kim assumed the new position.