Often in these situations, there are a few reasons. Monetization of users isn't always as good as the MAU would make it seem, or those users have significant overlap with Snap and don't represent a net gain to the company. This is especially true if acquisitions are more of a defensive measure (buy a business so someone else can't gain access to the users you already have).

Finally, sometimes in a bad market a business can be worth more as a write-off than a sale. Depending on Snap's balance sheet, they may get more money back in tax breaks than they would if they sold it (and, again, giving a competitor access to users you already have).

This is all hypothetical, of course. I don't know anything about this specific situation, but it's why lots of seemingly successful products get killed.

How does the write off being more valuable than selling for parts work?

You have $100m in operating income, but you shutter a business unit and take a writeoff for $100m, you now have $0 profit and therefore 0 tax liability (you saved ~$37m assuming that’s the effective tax rate).

If you sold the business for parts, for $50m you end up with $150 in profit (technically could be less if you took an impairment (like a writeoff but not for the full amount since you clearly recouped some value). You pay taxes on your profits and end up net negative against the scenario where you just shut it down.

This is overly simplistic but the gist of it is directionally correct.

Got it. Not sure you’re supposed to write off a business for 100M that you can only shutter for parts for 50M.

> In Japan, it is head-on-head as the most used social app with Line.

How is that possible? A lot of people in Japan use Line (86M MAU in 2020). With 40M MAUs in the entire world, Zenly is much smaller than Line. Anecdotally, I've seen young people in Japan using Snap. Haven't seen any Zenly.

I was wondering about that, too. I straight up asked my students here in Japan (College, 1st year) what apps they couldn't live without, and it was almost completely YouTube, Line, and TikTok.

I've never even heard of Zenly... nor seen it in the wild.

“Class, today we are going to talk about how you can’t believe everything you read on the internet”.

I used Similiarweb.com to look up the top free social networking apps on Apple App Store in Japan:

- 1 LINE app

- 2 Discord

- 3 zenly

- 4 Mirrativ（ミラティブ）ゲーム配信のライブ配信アプリ

- 5 ＋メッセージ（プラスメッセージ）

- 6 Pairs(ペアーズ) 恋活・婚活のためのマッチングアプリ

- 7 Facebook

https://www.similarweb.com/apps/top/apple/store-rank/jp/soci...

I think this is a ranking of new installs and not existing installs tho?

Exactly Line is like whatsapp and Zenly? Never heard any Japanese people mentions it or listed it along side their Line account

Apparently it was popular among middle & high schoolers back in 2018, but probably not among adults

https://twitter.com/livedoornews/status/1068834535838633986?...

right, also 2018 is already 4 years ago.

My understanding is that it can be extremely difficult to layoff individuals/teams inside of France. It might be easier to shut down an entire company/line of business.

A judge can still refuse to shut down the company. If employees want to take action and protect their rights, they probably can. Especially if the company is profitable.

I'd be surprised if it is profitable. Depending on the way the acquisition was done, they could just cut ties and let it implode in short order.

Not a huge amount the judge could do, practically, if the parent doesn't have a lot of other ties to the country.

In civil court, you can typically register a judgement in another country, and use that to begin asset seizure and collection actions.

This is certainly true in common law courts. The judgement can be challenged locally though.

(My point is, there is recourse. Whether it succeeds??)

1) even in France, it’s hard to go after investors if a company fails, assuming the paperwork is done correctly.

2) it isn’t clear how the actual corporate structure was setup or how the acquisition occurred.

3) all of this of course depends on how it was structured, managed, etc.

But yeah, there is also the ‘go ahead, make me’ element, which even if it never comes to that, plays a part in all this. Some folks do dumb things with structuring, but I’m guessing there is at least 2 corp entity layers and a national border between any one of the French folks employed there and the decision makers and money.

If the other players know the person with the money can just walk away, it tends to make things more polite.

If the person with the money also makes folks comfortable before closing up shop (severance, for instance), it also smooths the way for an amicable resolution and reduces hurt feelings.

It's not that difficult. It's costly.

It’s gonna cost them a lot anyway.

Wow, like when Google shut down Orkut despite it being huge in Brazil and India.

And then all those Brazilians flocked to VKontakte because apparently VK groups were somehow similar to what Orkut offered. I remember the rush to translate everything into Portuguese.

If Orkut got integrated into Google's ecosystem, spinning it out probably would've cost more money than they could've sold it for.

I imagine they factored this in before deciding to shut it down rather than sell it.

> If Orkut got integrated into Google's ecosystem

It would have met the same fate as if it hadn't - i.e., it would have been killed off.

Being big in one country is hardly a success, though. For a platform ideally you'd want to work across multiple regions.

If the country has 1 billion or 200 million people, as was the case, it's hard to argue your point

I mean, you have to have a pretty strict definition of success if, say, 100M daily active users does not qualify

(Disclaimer: last number made up)

Whatever you think of it, there is probably good chance there was some reason for it. Companies rarely write off huge investment for no reason.

Just because you or I don't see it does not mean it does not exist. The owners are probably much better informed that we are.

More likely explanation is they did some kind of calculation and decided it is not worth it and very likely we will not get to know it.

   A: I don't understand why they did this. It makes no sense.
   B: Companies don't do things for no reason.
   A: What is the reason then?
   B: I don't know - most likely they did some sort of calculation.

FYI, this type of exchange is information-free.

Often it doesn't make sense. They need to cut, so they cut. They need to spend, so they spend. They need to hire, so they hire. Is this usually consistent? No. They acquire companies and later shut them down. They hire tons of people then fire them, then later have to hire back people and start up projects that duplicate what they bought but later killed and then realize that the competition is in that market so they start it up again, but in a worse way. They allocate time and money into major moonshot projects and internal efforts and later kill off those projects they invested tons of time and money into. Startups are sociopathic in many ways.

As I learned long ago, don't expect venture-backed and post-IPO startups to act "logically". It's all a big hustle and a scramble for market share and whatever other metrics. There's a lot of collateral damage along the way, employees and customers be damned.

Startups aren't a "meritocracy" and management teams don't operate by best ideas win. Markets are brutal, management teams are opportunistic and often self-serving, investors are focused on growth at all costs and hitting metrics, and companies don't operate in ways that suit logic. They suit the needs to capture markets or do whatever they do to get ahead. Sometimes ethically, sometimes not.

Most of HN is information free. Water cooler banter with 1:20 posts offering anything insightful.

And yet here you are

1:20 is better SNR than most interactions...

Don't forget, you're here forever

It becomes information-full when you add:

C: The calculation that caused this was probably some black-box political battle that was won by Manager A, and lost by Manager B. It was probably decided based on personal preferences and biases of decisionmakers, as well as on who was friends with whom. Decisionmakers that run private corporations make these kinds of decisions all the time, and any attempts at reading the tea leaves, or the chicken entrails, to try to predict or explain these decisions is likely a waste of your time. If you'd like these decisions to be made in the open, you need democracy and transparency, which is not something that's is selected for in the modern business world. This is not a value judgement of the modern business world, it is just a descriptive statement about it.

Oh, there's certainly information. It's conversation steering for some, mind expanding for others, and the hinting tasks the brain with reconciling this question with present understanding. Neurotransmitter flux is being steered one way or another.

The overlap between "people who know what's happening" and "people who post on HN" is not always as high as one might hope.

In my experience in the corporate world, the reason is often one that only makes sense for the person making the decision. Spinning it off right now would be a big investment in time, and thus attention from the higher up's. They have a lot else on their plate right now and would rather not think about that, and the amount of money they would make from spinning it off (in the current environment) is not enough to solve any of their other problems.

It doesn't necessarily mean it couldn't have survived on its own if it were spun off. It just may not be what the decision makers want to be thinking about right now. It's not always about what's important to the company (i.e. the company's money), sometimes it's about what's important to the CEO (who really wants to think about other things, and if they have a major distraction that maybe doesn't go well it could add to board pressure on him to step down).

> one that only makes sense for the person making the decision

And sometimes (often?) that reason is "I'll show him who's boss around here, don't care if it costs millions of dollars and tanks the stock price, I'm untouchable and they're not gonna forget it!"

Good point. Focus is a resource too. If your the world suddenly shifts and you need to focus on survival it might make sense to cut things that might or might not be profitable but are unlikely to carry your business to survival but will for sure require a lot of focus to succeed.

Of course, this is just pure speculation.

I agree it probably made sense for Snap, but it is still a shame when a product people liked gets shut down when in a different context, their traction would have been considered a success.

My guess for the reason is to make it possible to lay off people in france. Probably much easier to shut down the entire product than lay off part of the teAm

I'm the CEO of Life360, another early and now at scale location app - I'm sad to see Zenly being shut down. The team there truly pioneered making rich map interfaces.

If the rumors are true (I hope they aren't - I agree with the comment this seems myopic) we might be a good home for members of the team who still want to stay in the mobile location space.

My email is chris at life360.com

For anyone unaware, Life 360 is largely used as surveillance technology so parents can monitor their children's locations. Hardly comparable to a social media app - it essentially desensitizes children to pervasive surveillance, and sends the message that their parents don't trust them. I'm obviously extremely biased, but I'd suggest anyone looking at this company consider the implications of location tracking children, teens and young adults.

https://www.washingtonpost.com/technology/2019/10/22/dont-le...

https://www.wired.com/story/life360-location-tracking-famili...

To add on, Life 360 has gotten in hot water several times for selling the location data of the people who use their service to 3rd party data brokers.

I'll push back on this a bit - we have always been transparent about our business model. We have always clearly explained how we use data to monetize. We did not have a single incident of abuse of this platform. When we started monetizing this way, it was not considered controversial, and the world has obviously shifted and evolved.

That being said, it was a small portion of our revenue, and we decided to shut down this part of our business. Well intentioned people can disagree in good faith, and we decided the controversy wasn't worth it even though our practices were misunderstood and sensationalized. We shifted our strategy to using a purely aggregated model that does not use any type of device level identifier (e.g. no IDFA, no in-house work around identifiers), which should not be considered controversial.

Trust is paramount for us, so we decided to stick to our core, which is subscriptions and devices.

If you sell anonymized location data, it would be trivial for whoever has the data to figure out who the individuals are.

If you work for a high profile company, hedge funds will use this data to determine where you are traveling and who you are meeting with. Governments buy this data to track their enemies. This is not something you want to be a provider of.

Additionally this is not something you want to brush off as an "agree to disagree" sort of thing, you should try to understand that this sort of thing puts your customers at risk.

The claim that "We did not have a single incident of abuse" holds no water because you would have no way of knowing something like that.

Honestly, how would you know that some foreign government or hedge fund isn't buying your customers data from the 3rd party you are selling that data to?

Please check out this article published in the NYT some years back. It's a long multi-part series, but worth your time.

https://www.nytimes.com/interactive/2019/12/19/opinion/locat...

"Anonymized" is a controversial term. Let me be very clear about the model we are moving to.

We are going "aggregated" so there are no GPS lines or raw feeds as consumable outputs. It is instead counters on places...e.g. how many people went to Safeway? What was the average speed at this road segment? We will show big patterns, such as where did the people who went to Safeway come from, but that will be done in 50 user blocks with randomized locations within census zones. Even Apple, as ostensibly the most privacy conscious company out there, uses their aggregated location data in similar ways (see Apple Maps Mobility Trends Reports).

If using aggregated data is bad, that will mean that we will not have basic things we all rely on such as traffic ETAs in nav apps, because that data was ultimately from probes in the real world. Should we outlaw this? There is a ton of nuance.

Re your link to the NYTimes and that type of data feed, I still think there is a huge gap between perception and reality, and from what I know of the industry there are generally very strong contractual commitments by partners to limit how these databases are used. If a partner who has direct access to a location data feed that includes raw data and breaches a contract, yes, people could in theory be "de-identified." That would also apply to Amazon for your S3 storage, or your phone carrier. I don't know where the NYTimes data came from, but I can say that all of our prior partners had very strict limitations on how the data could be used.

I hope that one solution from all this is that there are much strong penalties, including criminal ones, for misuse of data. It isn't a data broker issue per se - employees at companies for example are probably a much more real risk vector because the tools to access the data on a user-level exist. People should go to jail if they abuse it, either in first party or third party form.

And, this is all for naught if some of the government rumors about direct taps into wireless carriers are true.... https://theintercept.com/2018/06/25/att-internet-nsa-spy-hub...

To me there is a big difference between parent's rights and the government's rights. In a lot of ways kids could get more freedom because their parents can verify that they are where they are supposed to be. However, I do appreciate the concern for conditioning children into surveillance. I hadn't considered things from that perspective.

Here's a thought experiment/rhetorical question - how much should kids (of various ages) have the freedom to do things their parents don't approve of? Taking into consideration the full range of parents (amazing to abusive) and full range of children (needing lots of vs little guidance). I think how one answers that question probably guides a lot of how one feels about this sort of tech.

Honestly… I just want to make sure my kid isn't getting forced into something that even they don't want to do. Or maybe they want to but they don't have the context to understand how much it will negatively effect their life from that point forward. Think like serious injury or death… I totally understand the push back against over protective parenting but the opposite side is pretty rough too. Also, every kid is different. You might have one kid that seems to be able to adapt and understand situations and another who is totally underdeveloped in that area. It's kind of complicated

Hi, I appreciate the sentiment and agree that some small portion of our customers use the product for monitoring or tracking, but it is a minority.

We have been one of the few family focused location apps where parents and kids are treated as peers, anyone can pause location, and we have a "bubbles" feature where you can obfuscate your location to a 20 mile radius bubble.

When used properly, we empower parents to give their kids more freedom, not less.

And, our safety features, such as automatic crash detection, have literally saved thousands of lives. That is not hyperbolic. We run on over 10% of all iPhones in the US and have had a very positive impact on a large number of lives.

From the perspective of a teenager in the 1990s, I think you must be very young indeed if you think the product you describe represents 'more freedom rather than less'

I was a teenager in the 90s as well. And I was raised as a free range kid.

It is all in how it was used. People pushed back on cellphones for the same reasons people pushed back on location sharing apps today.

A big part of our fundraising pitch in the early days was to tell VCs to "try it yourself for two weeks and see if your perceptions change." 90%+ of people have the lightbulb go off after using it for a couple of weeks. We truly are not used as a "tracker" in the majority of cases.

We have had over 100 million downloads - I'm not saying outliers don't exist. Nor am I saying there isn't some meaningful (10%?) of the base who have parents who go a bit too far. But the average family is really not using it nefariously.

We're getting somewhere. People who oppose tracking are not thinking of a rosy family. They are thinking about what an abusive parent can do when you normalize location tracking for kids and it becomes the expectation. I would hate to be a kid now if what it meant would be that my parents would have my exact location 100% of the time. Kids are kids but they still have rights.

I have several children that walk home from school. Having an app like this would be really handy for us.

I have AirTags in my kids backpacks (also my father in laws pocket when on vacation).

I’m not trying to desensitize them to anything. It’s just handy to be sure they made it home, or that their bus is late and so on…

Intent and effect are different things. And certainly different ages call for different levels of freedom. My main critique was leveled at the company which directly facilitates the surveilance and not necessarily individual parents.

But I would hope that parents who do choose to monitor their kids in various ways also educate them (again age appropriately) on the importance (and potential safety tradeoffs) of privacy, as well as how to decide who to share their location data with (friends? internet friends? teachers? bosses? partners? police? corporations? governments?)

Again, not trying to criticize parenting decisions I have little context on, just trying to raise some discussion thoughts.

Yes, knowing where your children are is definitely surveillance. /s

Knowing someone is "at school" or "at a friend's house" is qualitatively different from being fed their geographic coordinates in real time. Kind of like if you were in the bathroom when a guest arrived at your house - There's a being difference between your spouse telling your guest, "They're upstairs" vs. "They're upstairs in the bathroom pooping".

Neither Find My Phone or Life 360 doesn't tell you when someone is in the bathroom vs upstairs. It just gives you information like "at school" or "at a friend's house". Not sure what you are arguing here.

No need to be sarcastic, both can be true. It's reasonable that you want to know where your children are, AND this desensitizes them to surveillance.

Hey Chris! Just wanted to say that my whole family uses Life360. It's my 58-year-old mother's favourite thing to watch since my brother and I flew the nest. But also super useful with my fiancee and I when sorting out who can look after our 1-year-old on short notice!

Thanks for your support. I appreciate it when people share stories that demonstrate we aren't a "tracker." I realize we are quite literally a tracker, but I think people who haven't used it misunderstand it.

So do you and your extended family mostly know where each other is most of the time? What level of accuracy is involved?

People in the Apple ecosystem use the Find My app. Tight knit groups of women, loose knit groups of guy friends, all the way to significant others, parents to children, children to parents, you name it.

Its gotten to the place where people don't even communicate addresses, and if you don't know to look at the stalker app to meet up with them, you'll just be left out. Its ironic that saying it that way still comes across as problematic (your boyfriend/parent asked you to share your location!??!?) but its very common and very benign.

You can stop sharing at any time and the recipients just shrug it off like "yeah that's understandable"

My whole nuclear family uses find my. More than once I’ve helped give my wife directions by watching her dot on the map (Apple Maps had some problem). I regularly use it to pickup the kids when they have been walking around town. Rather than texting me their location every time they move, I just get directions when I leave and let them know when I’m close. I mean, at least a dozen companies know my location at all times (Apple, Verizon, Weather.com, Google, Tile, etc) so hardly an issue for my family to know.

As far as stalking or surveillance, I mean most people live very boring lives so watching them go from home to work or school: you have to really have nothing going on.

Nothing to hide, boring, data already "public". Were you going for the highscore of "privacy doesn't matter" clichés?

Ironically we do a lot to defend our privacy, such as kids not having any social media. I just pick my battles and recognize those I have already forfeited (I mean we could just use get walkies and speak in code, which we did before kids had cell phones).

Based on previous experience working with Life360 data, the accuracy is probably within 10 meters or less.

Will Life360 ever add an option for consent to share like google's trusted contacts did? E.g. I'd like it if someone could ask for my location and give me 5 minutes to respond, and give me the chance to deny that request (sharing if I don't respond for safety reasons). Feels more respectful compared to the current state of Life360 where you can always see everyone's locations at all times.

We are largely focused on families vs the friends use case (which is why we were friends vs competitive with Zenly), and in the family context, always on makes sense. We are considering adding more features for close friends, which would include temporary location sharing as per your suggestion.

You should be ashamed of yourself. So many parents ruin their relationships with their children by aggressive over monitoring of their children. Your product is ruining privacy of the youth. Look on Reddit hundreds of stories of kids hating their parents cause they track their every moment even in college

> They could have likely sold it or spun it out, but did not do so.

Doing either would have required de-acquiring the team that develops and runs it. Whereas I assume the whole point of acquiring Zenly was to acquihire those folks to work on Snap (and likely then lay off the now-redundant engineers previously working on Snap’s geo features.)

Updated with how shutting down Zenly means firing the whole team. The Zenly engineers always worked on Zenly, and not on Snap. If the goal was to acquihire, they are letting their whole acquisition go.

It smells like a complete change in direction. I am just unsure why not sell an asset that seems pretty valuable, or spin out, keeping ownership stake.

Presumably they’re going to write off the cost of the acquisition for tax purposes. I suppose that doesn’t preclude selling the assets like the brand and the software, but since it looks like they’re in a hurry to reach profitability, the certainty of booking tens of millions of future tax offsets must have seemed appealing.

If you've never made any money - how much are you really thinking about taxes?

That’s the point: They’re clearly attempting a shift from growth to profitability. Those future profits look that much better to investors if they have (say) $50M in tax offsets already banked.

You know what looks better than $50M in tax offsets? $500M in cash

I don’t understand the point you’re making. Zenly could be readily sold for $500M?

There’s cost, time, and unknown returns in spinning it off.

And it would apparently give a geographically dominant 40 MAU to a competitor.

It’s an insult to users and team members for Snap to just shut it down, and it could become bad PR, but there’s a reasonable case to be made on near-term business strategy.

You don't actually know if it's valuable. Users = costs, they are only valuable if you can monetize somehow. Inability to develop a workable monetization strategy would lead to this sort of outcome.

$300M is too much for an acquire unless they are super AI scientists who have know-how that's worth a few billion.

$30M - maybe. If they have 30 person team and they are really good.

I remember that deal and it stunk. It feels like one of those pilfering Private Equity deals where someone is getting payback for something or the other.

Or it was to kill off the competition intentionally. They may have seen Zenly as a major threat at some point.

Divide that price by the # of users and the $300M can make sense...

They had 4M users, it's not enough unless it was growing hyperbolically, which it wasn't.

> In Japan, it is head-on-head as the most used social app with Line.

This is my first time ever hearing of Zenly. Line is unavoidable. Instagram and Twitter trail it and Zenly is likely up there with AIM and ICQ. There’s no way this is is true lol

Same here, never heard of it until now.

According to an insider, they'd worried Zenly could be used by Snap's competitors https://twitter.com/GergelyOrosz/status/156499481770840883

Never heard of it which doesn’t seem like a particularly good thing for a social media app/product.

> Zenly is (was?) popular in Japan, Southeast Asia, Eastern Europe and the Nordics.

Would you clarify which of the above regions you're in? Personally I'm in the USA so I would not expect my not having heard of it to be in any way relevant.

I’m currently in Scandinavia and never heard of it

I’m in the US. If it’s only popular in a few regions and likely pulls very little ad revenue on its own then is it terribly surprising that they are shutting it down? Seems like a failed acquisition that they didn’t really do much with.

To avoid laying off more Snap employees they're firing those weird Europeans working on an app most Americans haven't heard of. It's damage control.

They probably wanted to bring it to other countries, ie: USA, but couldn't figure a way to do it without getting sued. People here are different. They'll abuse the shit out of an app like that to do all sorts of nasty stuff.

Nah man as a heavy snap user i can tell you the bots and scammers are not native english speakers. Most of the abuse is targeted at America bc we have money but it's perpetrated out of brazil, bangladesh, india, etc.

Was it profitable?

I’m from Southeast Asia, never heard of Zenly.

40M MAU globally is not head-to-head with Line (which way bigger), Line is also primarily a messaging app like Whatsapp, not sure if that commenter knows what they talking about

It's definitely not popular in the Nordics.

How does Snap monetize it?

d

I don't see how those two ideas connect