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Snapchat launches news services and ads

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Snapchat is attempting to make some revenue by expanding its services to feature ads and news. The new features will probably appear and then disappear with the touch of a finger in the same way the stream of selfies already work.

The new service, Snapchat Discovery, will display disappearing video clips, news articles and ads in the same vanishing message style already used. The startup company has been discussing the expansion with advertisers and media companies. MailOnline, the online extension of British newspaper the "Daily Mail" is reported to be interested, as well as a dozen other media companies such as newspaper, magazine and television networks.

Snapchat, a free app, has an estimated 27 million users and has not yet had a stream of revenue. Users send more than 500 million vanishing messages a day. Over half of Snapchat users are ages 13 to 17. Snapchat Discovery would allow paid promotions, where brands will pay for ads, finally finding a way to cash on its young users.

While the vanishing picture app may not be the first place you would go to read breaking news, brands like Taco Bell, GrubHub and Yum Brands already use the app to promote their products and hold contests with customers. "If it looks like it would be connecting us with new diners, we would consider it," Abby Hunt, spokeswoman for Chicago-based GrubHub says.

Snapchat Discovery will allow users to read daily news stories, watch TV or movie clips, or see an ad for the set time before the content disappears. Linking up with media companies would make the three-year-old app more desirable to investors.

Snapchat declined a $3 billion acquisition offer from Facebook last year, but has been raising money from investors. Although they passed on the investment, Alibaba Group Holding Ltd. almost invested $10 billion in the app last month.

To make the app more appealing to advertisers, Snapchat launched Snapchat Stories last year, which allowed messages to appear longer than the typically 10-second "snaps" before disappearing.

"Snapchat has been laying a lot of groundwork for making it a place that is safer for brands," says David Berkowitz, chief marketing officer at ad agency MRY.

Snapchat Discovery is set to launch in November.

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