Snapchat to introduce advertising to boost revenue

Snapchat, the start-up that raised money this year at around a $10 billion valuation without any revenue, will start making money from advertising soon.

"People are going to see the first ads on Snapchat soon," chief executive Evan Spiegel said at the Vanity Fair New Establishment Summit in San Francisco yesterday.

He said the ads will be around the company’s “stories” product, and will be optional to view. “We’re cutting through the new technology around ads to the core of it, which is telling a story.”

The Los Angeles-based company, which makes a mobile application for sending disappearing photo messages, has attracted investors including Yahoo! and Kleiner Perkins Caufield and Byers at a $10 billion valuation this year.

Snapchat has been working on its business model. Chief operating officer Emily White was in New York last week for the Advertising Week conference, explaining the service.

Snapchat has been experiencing fast growth. Users send more than 700 million disappearing "snaps" a day and more than 500 million stories viewed daily, the company has said. It competes with Facebook, which tried to buy Snapchat for $3 billion last year and started its own product to send ephemeral photos and videos after being rebuffed.

-Bloomberg