Yes, we now live in a world where people are turning up their nose at $3 billion in cash for what amounts to a fad. If you’re not familiar with Snapchat it’s an app that allows you to take a photo and send it to someone. The novelty that Snapchat provides is that the photo self-destructs after about 8 seconds not allowing the user to save the photo. You can imagine the implications of being able to send a photo of your choice to someone knowing that it’s not going to exist in 8 seconds.
If this report in the WSJ is true then this is insane.
The offer, and rebuff, came as Snapchat is being wooed by other investors and potential acquirers. Chinese e-commerce giant Tencent HoldingsTCEHY had offered to lead an investment that would value two-year-old Snapchat at $4 billion.
You may remember that it was just over a year ago that Facebook purchased the Instagram photo app for $1 billion. Apparently Zuck is ready to make a play for another popular photo app. One reason that Zuckerberg is likely so insanely interested in Snapchat is its popularity with teens. Facebook recently reported during an earnings call that interactions with teen users was down slightly. Teens have been migrating away from the Facebook their parents are now firmly entrenched in and moving on to new messaging apps. Snapchat is one of those apps.
*EDIT: I was so blown away by the $3 billion offer my mind was comprehending it at $300 million and I originally mistakenly wrote $300 billion. Obviously it’s not $300 billion. But, $3 billion is still insane. Thanks to reader Michael for pointing out my idiocy.*