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Last year, Facebook made a $370 million investment in Viddy, a video sharing app created by a small startup company in California.
Employees of the company, located near Venice Beach, had high expectations for its future after the social media giant and Justin Bieber provided substantial funding for the app’s development.
According to Reuters, the app was described as Instagram but for video sharing, which had the potential for a billion-dollar buyout.
According to the company website, Viddy is a simpler way to share and upload videos.
However, last month, the company fired its CEO and laid of almost half of its employees. The reason? Dramatically decreasing users on Facebook.
Brian O’Malley, a Viddy director, told Reuters, “Everyone has known for years that Facebook can be a huge driver of traffic, but Facebook also frequently changes who gets traffic. We certainly didn't anticipate the decline."
Viddy’s story is similar to many others who have been picked up by Facebook for their apps. The numbers plummet as a result of Facebook’s unpredictable changes in the way apps can be accessed by users.
Facebook often either cuts off apps completely or makes it more difficult for viewers to access them. This has made businesses extremely weary of getting involved with the social media leader.
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