Snapchat May Risk Connecting Apps, Despite Facebook Uproar

Snapchat soon may have a Connected Apps feature that is similar to the functionality at the heart of the Cambridge Analytica brouhaha, which has Facebook writhing under congressional scrutiny and consumer backlash.

The latest beta features a new Connected Apps tab within the setting page, Mashable reported earlier this week.

The page displays the following text: "These apps are connected to your Snapchat account. Choose an app to control what it has access to."

Snapchat already allows Bitmoji and Shazam apps to connect directly to users' Snapchat accounts.

It's not clear whether Snapchat actually plans to implement the feature, given the heat Facebook has drawn. Further, it's not clear how similar it might be to Facebook's Connected Apps API.

How Facebook Got in Trouble

The Cambridge Analytica controversy sprang from the use of an old version of Facebook's Connected Apps API, which had a "friends permission" feature that let third-party developers collect users' data without their consent or knowledge.

Through a personality test developed by Cambridge University academic Aleksandr Kogan, Cambridge Analytica managed to obtain data on 50 million Facebook members without their knowledge or consent.

Although the app was installed by just 270,000 users, the "friends permission" feature allowed access to the data of tens of millions of their friends.

The Root of Social Media Evil

"The advantage -- and disadvantage -- of social apps like Snapchat and Facebook is that they rely on user traffic and data to make money, and for their stock valuation," Rebecca Wettemann, vice president of research at Nucleus Research, told TechNewsWorld.

Snapchat needs to make money. Its return on capital following last year's IPO was -45.02 percent, according to S&P Global Market Intelligence, which indicated the company had a nearly 1 in 20 chance of default.

"Access to data on user behavior is key to targeted advertising," said Michael Jude, research manager at Stratecast/Frost & Sullivan.

"The name of the game in social media is monetizing user data creatively," he told TechNewsWorld. Third-party access "is one way, but this is a sensitive area, and Snapchat needs to avoid irritating its users while disclosing enough information to make a third party willing to pay for it."

Congress has invited Facebook CEO Mark Zuckerberg, along with the leaders of Google and Twitter, to testify April 10.

United States Representative Bobby L. Rush earlier this week introduced the "Data Accountability and Trust Act."

Facebook also faces several lawsuits -- brought by states, investors and users -- over the Cambridge Analytica issue.

Facebook shut down its "Partner Categories" feature, which lets third-party data providers offer targeting directly on Facebook, earlier this week.

None of this is going to help Snapchat, which is in trouble. It recently redesigned its platform to separate social content from media content, and it laid off 120 engineers.

The new format is bad for advertisers because users can just avoid ads, observed Trip Chowdhry, managing director of equity research at Global Equities Research.

"Snap lacks user data, hence ad targeting will always remain challenging," he wrote in a research note. "Its ad targeting will always remain imprecise because it doesn't have interest, social or activity graphs, so it "will struggle to acquire advertisers."

Fear and Loathing on the API Trail

Snap either should create the API or delete it completely, suggested Rob Enderle, principal analyst at the Enderle Group.

"There's a lot of nervousness right now about third-party apps, and the concern they were used to manipulate not only the U.S. election but also Brexit," he told TechNewsWorld. "Leaving a blank page isn't a good idea because folks will fill the page with their imaginations."

However, killing the API would impact Snapchat's ability to monetize, Frost's Jude pointed out.

If Snap should decide to retain the feature, it could safeguard user data and ensure user privacy by abstracting the base data to a metadata set, he noted.

"Providing access only to sanitized and masked data is a good approach," Jude remarked. "In other words, you can know about me, but you can't know who I am."