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 and Bytedance’s TikTok for advertising revenue, Reuters reported.

“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. Even rivals like Pinterest have been facing the heat. Meta stocks have however seen a rally on the back of strong ad revenues that cushioned AI spends.

Snap’s stock has fallen around 48 percent 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.