When Facebook can graft Snap features onto every endpoint of their network, there's no oxygen left for Snap. They cannot get scale, and that's what you need in advertising.
The online advertising world has changed a lot since Facebook's IPO. 180m users and an awkward ad buying experience aren't as compelling as they used to be.
Plus, it sounds like not all of those 180m Snapchat users are interacting with the part of Snapchat where they would see ads, so the audience is smaller.
That said, I completely agree that a lack of users isn't preventing them from having a decent advertising business. It's just preventing them from doing it on the terms they want.
They got scale, particularly among the younger demographic where the product was wildly popular. They never cracked an advertising model that worked.
I buy that it's harder for startups to break into social today, but that's true of most industries as they consolidate, I don't know that it means they're a monopoly.
Slack is a social networking tool that has managed to grow and scale by focusing on different use cases and by using a different business model.
If Snap had figured out how to get to profitability, or even focused more on reaching out to older users they may have found themselves in a different situation.
When Facebook IPOd, they had 160m monthly active users, and had $3.7B in revenue with $1B in profits.
And yet with more users, Snapchat pulls in $200m in revenue last quarter, and lost $440m.
The users are there. That's not their problem.