How Michael Lynton Could Boost Snap’s (Wall) Street Cred

Michael Lynton
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To understand what Michael Lynton brings to the table at Snap, think about what executives like Sheryl Sandberg have meant to Facebook or Eric Schmidt to Google.

When the former Sony Pictures Entertainment CEO takes his place next month as chairman of the board at Snapchat’s parent company, alongside CEO Evan Spiegel, the pairing will be a classic Silicon Valley move: an experienced, level-headed operator becomes yang to the yin of the inexperienced but visionary genius at the helm.

“Sheryl went in as COO, and Michael is going in as chairman, but it’s essentially the same thing,” says Mike Vorhaus, president of media-biz consulting firm Magid Advisors. “The structure of the partnership is different, but for Snapchat, this is the way to do it.”

As Snap heads toward an initial public offering sometime in 2017, the point of the promotion may be to calm fears on Wall Street about the absence of experienced leadership at a company ruled by a 26-year-old.

“I admire Spiegel for bringing in adult supervision — that’s important,” says Michael Pachter, analyst with Wedbush Securities. “What Lynton can help him with is oversight of management of the company, making sure that they are lawyered-up right, have the HR policies that keep their employees happy, that their facilities function properly, because they are going to be a big company.”

While Hollywood was caught by surprise Jan. 13 by Lynton’s defection from Sony, his move to Snap really isn’t all that surprising. He was an early investor in Snapchat, putting in $200,000 in 2012, when the app was just beginning to draw buzz among teenagers.

Lynton joined Snapchat’s board in 2013, cementing a bond with Spiegel that insiders say isn’t quite a mentor/protégé dynamic, because Spiegel has been cocksure and headstrong from the moment he exited the womb. But Lynton is as close to a trusted adviser as Spiegel gets; now that he is out of Sony, he is poised to go into full-time consigliere mode.

But anyone who knows Spiegel can tell you he will be very much firmly in control of Snap. While Lynton may help the company mature from scrappy upstart to multinational corporation, he’s not expected to have much of a hand in a strategic direction that is all Spiegel.

“He’s not, like, this with-it, hip, tech-savvy social-media tycoon,” observes Pachter. “He knows a lot about the film business, but Snapchat is not a media company in the same way as Sony is.”

However, Lynton could come in handy as Snapchat edges closer to the content business. While the app is primarily known as a communications tool, the Venice-based company has been building out a programming component in recent years that has helped fetch Snapchat 10 billion views per day, according to its most recent self-reported count last April. But Snapchat seems to have moved away from early experiments in producing videos in-house and more in the direction of partnering with content companies from NBC to the NFL.

Vorhaus notes that Lynton is no internet virgin, having worked as CEO of AOL Intl. during its doomed Time Warner phase in 2000. “I would say if I was going to pick a guy from Hollywood, he would be high on my list,” says Vorhaus.

Sony’s hybrid structure as part gadget company, part studio could give Lynton some insight into how Snap could set itself up as it makes its own overtures into the hardware business. Last year, Snap began rolling out Spectacles, a product that embeds a mini-camera into hip sunglasses. Spectacles has become a small but buzz-worthy win for the company.

As Snap fills out offices around the globe, it’s going to help to have someone who has already been atop the inside of infrastructure at this scale. And Lynton will likely be in an inner circle with the reins to the company fully in their grip given reports that its founders will retain more than 70% of voting power when an IPO frees up shares to new investors.

But some believe Lynton is mere window-dressing, chosen to play the role of the éminence grise to help Snapchat achieve a more reputable profile ahead of an IPO expected to clear $25 billion. “I’d say Lynton will function as chairman of Snap about as much as Rudy Giuliani will lead the White House’s cybersecurity efforts,” cracks one industry cynic.

Hands-on player or not, expect Lynton to figure out fast how best to complement Spiegel. “It’s not like he’s not going to start acting like Evan’s father,” says Vorhaus. “Michael has gigantic incentive to want to make this work out. He can double his net worth.”