Snapchat is expected to become more popular with advertisers than Twitter, Yahoo! and AOL within three years, with revenue expected to exceed $3 billion in 2019.

"Third Force"

The bullish expectations are based on advertisers taking aim at the young audience reached by the "burn-and-burn" photo app. According to Ampere Analytics, more than half (51 percent) of Snapchat's video users are under the age of 24, compared with 23 percent for Facebook and 17 percent for Google's YouTube.

Brands are also keen to see a genuine competitor challenge Facebook and Google in the advertising market, two tech giants that have recently come under attack for their advertising practices.

Facebook and Google now together account for 58 percent of the $141 billion mobile advertising market.

 "You often hear advertisers say they're very upset that so much advertising spending is in the hands of just two companies." Cathy Boyle, chief analyst at eMarketer, a market research firm that forecasts the size of global mobile advertising, points out that "if a third or fourth competitor emerges, they will be happy to split some of their budgets between competitors other than the two monopolies." "

Sir Martin Sorrell, CEO of advertising giant WPP Group, recently called Snapchat a potential "third force" in the global mobile advertising market, but many investors and analysts remain cautious about Snapchat's future prospects.

The IPO of the company, which went public earlier this month, was highly sought after and was valued at $29bn at one point. But its share price is falling steadily. The stock soared from an IPO price of $17 to $26 in just two days, but has now fallen to about $19.

 "Snap is a promising young company with great opportunities." "Unfortunately, its value is grossly overvalued given the potential size of its long-term growth opportunities and the risks it faces in meeting execution development opportunities," Brian Wieser, a senior analyst at Pivotal Research, wrote in a note to investors. "

Visser said Pivotal Research was "cautiously bullish" on Snapchat, but even given a target price of just $10 a share, its forecast model for the company's business "may still be a little overly optimistic."

Facebook and Instagram threats.

Snapchat also faces a series of problems and potential dangers. Mark Zuckerberg's Facebook, for example, is ubiquitous, dominating the social media market with 1.2 billion daily active users and sitting on Instagram, Snapchat's most direct rival. Instagram has 600 million users, up from Snapchat's 158 million.

Last summer, Instagram followed Snapchat's lead in launching a feature called Stories. Instagram Has 150 Million Daily Active Users. The launch of The Instagram Stories feature has also exacerbated another Snapchat concern: the pace of growth has slowed.

In the first two quarters of last year, Snapchat's user growth was 14% and 17%, respectively. But after the launch of Instagram's Stories feature, Snapchat's user growth in the second two quarters of 2016 dropped sharply to just 7 percent and 3.2 percent, respectively. The company blamed "technical problems" with the launch of the new product, but acknowledged in the IPO filing that Facebook and Instagram could be a huge threat to the company.

"Our competitors may imitate our products, which can hurt our user activity and user growth," Snap admits. "

Snap's successful IPO makes co-founder Evan Spiegel the world's youngest billionaire with a $5.5bn value. However, his company is still in a state of severe loss.

Snap raised $3.4 billion through an IPO, so it has plenty of money to continue to build innovative products, such as video-wearing glasses. But its day-to-day business lost $373m in 2015, up from $515m last year.

Voting rights disputes.

One of Snap's most controversial issues is that it gives founders and early investors full control over the company's voting rights. In its prospectus, the company said it believed it was the first U.S. company to list shares that did not have any voting rights.

The company said, "We . . . Unpredictable ... The full concentration of equity voting rights in the hands of our founders will have an impact on our share price and business. "

Corporate governance experts advise potential investors not to invest in Snap because of voting rights issues. "It's about responsibility. If you invest in someone, you want to make sure they use your money properly and be able to explain their actions back to you. Sarah Wilson, chief executive of Manifest Investor Advisors, said: "Voting rights are in the hands of a few, and most shareholders are at great financial risk - you know, those founders will have both high-pay schemes and share ownership. "

However, Sir Su Mingtian of WPP recently rejected this view, saying that companies that are concentrated in the hands of minority shareholders and that companies that "run counter" to good corporate governance, such as Snap, Facebook and Rupert Murdoch's News Corp and Fox, are able to take more risks and tend to perform better financially.

Snap's current market capitalisation of $22bn is twice that of Twitter ($11bn), but it is still worth less than tech giants such as Facebook ($393bn) and Google ($596bn).

User activity.

Admittedly, the social network darling caught the important point that users love it. Two-thirds of Snapchat users use the app every day, with daily active users visiting the app an average of 18 times a day, spending an average of 25 to 30 minutes a day sending messages on Snapchat and viewing messages from friends, celebrities and advertisers.

This activity between young audiences helped Snap's revenue soar to $404 million last year from $58.7 million in 2015 and is expected to reach $1 billion this year.

Nick Baughan, CEO of Maxus UK, a media agency, points out that Snapchat does have good growth opportunities, but advertisers remain cautious. "It's not 'the emperor's new clothes', it's an exciting opportunity." "But Snap's IPO came early, and the advertising products haven't fully matured yet, " he said. "

 "Snapchat is now able to steadily appear within the innovative budgets of many agencies and advertisers. As responsible advertisers and agents, we need to make sure we're where our audience is. But innovation is meaningless unless Snapchat is evidence-based. "