Advertisement

'Story' of their lives: How Facebook is trying to outmaneuver Snapchat

Snapchat. In the battle for social media dominance, two investors give their take on how Facebook and Snapchat are faring against one another.

The battle for social media dominance features two goliaths: Snapchat (NYSE: SNAP) and Facebook (NASDAQ: FB) — and while the latter currently has the upper hand, the former has a shot at a come-from-behind victory, two investors recently explained.

Recently, Facebook's platform unapologetically copied Snapchat's signature feature: Video "stories" that allow users to temporarily capture moments in time. That feature has become wildly popular on Instagram, amassing more daily users than Snapchat.

For that reason, Lowercase Capital partner Matt Mazzeo predicted in a recent Facebook Live interview that Instagram's stories, Facebook and WhatsApp will eventually merge, becoming an independent application with its own news feed and notifications as it continues to grow adoption and daily use.

Such an independent stories app will be Facebook's camera-first app offering, allowing it to maintain the text and news-feed core of Facebook and Messenger, Mazzeo added.

Some tech watchers point out that Facebook's existing reach to user data and preferences is broader. The platform's ability to record likes, dislikes, posts and activities dwarfs Snapchat, which has limited reach in its user's life. For that reason, a potential "discover feature" for stories within Facebook could become more potent than Snapchat's.

However, it's misguided to believe the Facebook platform competes with Snapchat, said Luben Pampoulov, co-founder & partner at venture capital fund GSV Capital, who was an early investor in Snap.

"Facebook's not a personal content social network any longer," he told CNBC. Indeed, with trending news, live videos, events, groups, and a buy-sell marketplace, the social network is more of a home for users' digital life.

Yet that same crowded platform made Pampoulov question whether Facebook's copying of Snapchat's stories formula could be sustainable in the long term. "The only app where stories is working is Instagram," Pampoulov said.

Despite the fact that Instagram Stories has attracted more than 400 million daily users to Snapchat's estimated 160 million, Pampoulov believes Snapchat will eventually come out on top.

"In our opinion there are two major differences between Instagram Stories and Snapchat Stories: one is that Snapchat's product itself is ahead and more advanced technologically (especially after the launch of its new 3D image lenses ), and the other is that the time spent per user is still superior at Snapchat," the investor said. According to GSV research, Snapchat users spent about 30 minutes per day on the app, while Instagram clocked in at 15-20 minutes.

Although Snap's stock has tumbled more than 14 percent since its initial public offering, Pampoulov has added to his investment.

Snap founder "Evan Spiegel's a visionary, and he'll out-innovate to stay ahead of the competition," Pampoulov said.



More From CNBC