The Snapchat Ghost Comes Back to Haunt Facebook

Earlier this week, the popular photo messaging service Snapchat announced that it will soon add new functions to allow for both text and video messaging, meaning it will compete directly with Facebook’s (NASDAQ:FB) recently purchased chat service WhatsApp and Facebook Messenger.

Previously Snapchat has only allowed users to share photos and videos that self-destruct after viewing and notify a user if someone has taken a screenshot of their image. Now the app is looking to foster more direct conversation between users through a function called Chat. “Until today, we felt that Snapchat was missing an important part of conversation: presence. There’s nothing like knowing you have the full attention of your friend while you’re chatting,” Snapchat said in the blog post announcing Chat.

In order to use Chat, you swipe right on a contact’s name in your friends list. Once the two parties are done conversing, like Snapchat photos the messages are erased. There is still the option to take a screenshot if a part of the conversation needs to be remembered for any reason. Snapchat will also signify whether a user is ‘Here’ in Chat. If a friend is marked as ‘Here’ a video conversation can be started by pressing and holding on the screen, similarly to the way video is taken.

While Snapchat has yet to monetize its service, the company turned down multi-billion dollar offers from both Facebook and Google (NASDAQ:GOOG) (NASDAQ:GOOGL) late last year. The company has had major success with its novel concept of causing content to self-destruct after one viewing. Young people have shown to be worried about how they appear online, which has made them turn away from traditional social media sites like Facebook where unseemly photos can come back to haunt them. Using Snapchat to send sexy or drunken picture messages allows for the fun with minimized danger.

Snapchat has gotten lots of attention recently due to its explosion in popularity. In the fall when Facebook made its $3 billion offer for the service, Snapchat was seeing 400 million photos being shared everyday. Snapchat turned down Facebook’s offer and also showed Google the door even though it raised Facebook by another billion. Some industry watchers thought turning down such offers when the service has yet to generate any meaningful revenue was completely insane, but the company seems to be confident in its decision.

Facebook bought the photo-sharing site Instagram back in 2012 for $1 billion and earlier this year it bought the chat app WhatsApp for a whopping $19 billion. Late last year after the offer for Snapchat was turned down, Instagram announced its own messaging service called Instagram Direct, but that service hasn’t gotten much attention since while Snapchat’s growth continues to skyrocket. Meanwhile WhatsApp is growing its own user base extremely quickly and offers a similar feeling of comfort to users, who can use the app to communicate online without having to worry about the conversation becoming public.

Some recent reports have suggested that Facebook is losing its teen user base to private messaging apps like Snapchat, WhatsApp, and LINE, which offer a more private way to communicate via mobile and give concerned young users a way to better manage their digital footprint. Facebook has reported that its teen user base has grown smaller, but the company remains confident that through outside apps like Instagram and Facebook Messenger, it can provide teens with the anti-Facebook experience they’re searching for in private messaging apps.

Some analysts believe that Facebook has already successfully transitioned from being a cool fad for young people to being a utility that people from all walks of life use to navigate their lives on a daily basis, and so it doesn’t matter that young people are turning to other places for online socializing. Meanwhile Snapchat seems bent on picking up that young user base that’s losing interest in Facebook, and hopefully rationalizing its decision to turn down $4 billion.

Follow Jacqueline on Twitter @Jacqui_WSCS