A $1.1 billion deal between Snap and Snapchat will give the social-media company the tools to create a platform that could help it build the next generation of messaging apps, including one that uses Snapchat’s popular social media features.
The acquisition of Snap and its acquisition of the video-sharing app Snapchat could make Snapchat the next Facebook or Twitter, said Jeff Weiner, the head of global media at The Weather Company.
“They’re in a much better position than they were,” Weiner said.
The company, which is valued at $11 billion, has been quietly building out a Snapchat-like social-video app since it was founded in 2013.
The deal with Snap was announced Thursday, and Snapchat said it would open an office in Los Angeles.
Snapchat’s video-snapping business has grown by nearly 40 percent since 2013, and it now boasts more than 6.2 billion video views on its Snapchat-owned YouTube channel alone.
The app has been a big success, attracting tens of millions of users a day, according to Snapchat CEO Evan Spiegel.
Snapchat has said it plans to invest heavily in Snapchat-style video ads, which could help the company expand into the more mainstream social-networking services.
The video-video ad business is important to Snapchat because it allows the company to tap into the audience it hopes will use the platform for its advertising.
The Snap-owned Snapchat app currently has fewer than 100 million daily active users, according the company.
That’s a tiny fraction of the hundreds of millions who watch the company’s content on the platform every day.
But Snapchat has made great strides in building video-related ad revenue, as well as in getting advertisers to embrace its Snapchat feature.
Snapchat started using Snapchat-styled video ads in 2015, as part of a strategy to make the platform more relevant to advertisers.
Snapchat also began rolling out video ads on its website earlier this year.
The social-virus-fighting app is the fastest-growing video-sport in the U.S., with more than 400 million monthly users.
It has also attracted attention for its viral videos.
Last year, it acquired a Snapchat competitor called Instaflix, which was a video-uploading service with a much higher reach than Snapchat.
The Snapchat-Instaflox deal could help Snapchat capitalize on its growth, Weiner said, adding that Snap will get a “significant piece of the pie.”
“We believe that Snapchat will be able to make it a much bigger player, and that they’ll be able and will continue to be able make Snap better in a way that they’re still in a very competitive and highly profitable business,” Weiner told Fortune.
Snap also will be getting access to Snapchat’s massive data base, which the company said it will “invest heavily in.”
Snapchat will also gain a new business model for advertising, according a source familiar with the deal.
The new model, which will be rolled out in the second half of 2017, will allow the company, through its advertising partner, to pay for ad impressions that appear on users’ Snapchat stories.
The two companies are also expected to create new advertising partners for Snapchat.
“Snapchat is in a position to be one of the biggest advertisers in the space,” Weiner added.
“The next wave of advertisers that we see is Snapchat and Instafrix.
Instaflsix is the most obvious example, but they’re all pretty similar.
They’re all very big players.”
The acquisition also could help Snap get into new territories like China, where the app has an estimated 10 percent market share.
Snapchat will continue operating in the United States, where its users are relatively small and the platform’s users are highly loyal, according Weiner.
Snapchat said Thursday that it will expand its global reach, including expanding into the Asia-Pacific region.
Snapchat, which last year raised $400 million in Series C financing, has struggled to stay relevant in China, with many users abandoning the app because of its content restrictions.
The latest app to break into the Chinese market was WhatsApp, which has gained more than 100 billion daily active user impressions, according Quantcast.
Snapchat hopes to reach millions more Chinese users by the end of the year.
Snapchat is also looking to take on Snapchat rival Facebook Messenger.
Snapchat announced it would invest in Facebook Messenger earlier this month, which had about 3.7 million daily user impressions.
Facebook has been building out its social-marketing platform, but Snapchat is already using it to launch video ads.
Snapchat and Facebook have also worked together on an ad-targeting program that would target Facebook users to receive a message from Snapchat.
Facebook said Thursday it had spent $3 billion to buy Instagram last year.