Snapchat was offered $3 billion to be acquired by Facebook and Snapchat declined the offer. This article is especially interesting because it puts such a high monetary value on an application that still hasn’t figure out a way to monetize its operations. For Snapchat to reject such a high offer seems unheard of considering Facebook’s purchase of Instagram last year for $1 billion. Instagram is now profitable because advertisements are displayed on its feed, which was created after the acquisition by Facebook. Facebook must have some sort of plan for making Snapchat profitable since they offered such a high sum of money. The rejection was shocking and makes me wonder what both company’s main objectives are.

http://www.usatoday.com/story/tech/2013/11/13/report-facebook-offered-snapchat-3-billion/3517929/

 

Advertisements
Link | This entry was posted in Uncategorized. Bookmark the permalink.

2 Responses to Snapchat Declines $3 Billion Facebook Offer

  1. sosharp1 says:

    After Twitter’s successful IPO and acquisition of MoPub (which creatively inserts advertisements into Mobile Apps) and Facebook’s unsuccessful incorporation of advertisements, Facebook needs to stay competitive with strategic acquisitions the company can turn profitable. For example, sending targeted users video advertisements varying in time in Snapchat. The offer was probably overvalued because of Facebook’s easy access to capital and fear of Twitter’s new access to capital.

    Additionally, Facebook is beginning to lose its younger market, which it attributes to Snapchat.

  2. Yes, it is unclear how much of that offer was due to Facebook believing that they could monetize Snapchat immediately, and how much of it was simply to protect themselves from a potential competitor.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s