Sept 3 (Reuters) - Snap will concentrate on

expanding and diversifying its underperforming advertising

business with a focus on augmented reality, CEO Evan Spiegel

informed employees in a note on Tuesday.

The announcement comes amid a challenging period for the

Snapchat owner, as it contends with major social media players

such as Instagram parent Meta Platforms ( META ) and Bytedance's

TikTok for advertising revenue.

"You may be wondering why, with all of the progress we've

made in our business over the last year, our share price

performance has lagged the overall market. The answer is simple:

our advertising business is growing slower than our

competitors," Spiegel said in the note.

At the start of August, Snap projected a weak forecast for

the current quarter, citing a decrease in advertising spend and

is now expected to report fiscal 2024 revenue of $5.34 billion,

according to LSEG data.

Snap's stock has fallen around 48% so far this year.

The company will also revamp its market strategy by

launching new ad placements powered by machine learning and

automation.

It is also developing augmented reality and smart glasses,

much like its peer Meta.

"We are investing in creating augmented reality glasses

that allow people to interact with computing, the world, and one

another in totally new ways," the note said.

In June, Snap launched generative AI tools that enable users

to apply more realistic effects when using their phone cameras

to film themselves.