News broke this past Wednesday that Snapchat had reportedly turned down a $3 billion offer from Facebook to purchase the app. While turning down $3 billion might sound crazy to most of us, several other investors have also expressed interest in in acquiring the app—one of which values Snapchat at $4 billion. Those briefed on the matter claim that Evan Spiegel, the 23-year-old CEO and co-founder of Snapchat, will likely hold off until next year before considering an offer.
Whether or not Snapchat is your thing, there’s no denying the app’s growing popularity. The idea is a simple one—friends can send each other pictures with the option of including text or a creative doodle. The only catch is that the pictures disappear after a few seconds, thus forcing users to be more engaged from picture to picture and allowing them the freedom to take less-than-quality photos.
At just two years old, Snapchat has consistently ranked among the top downloaded apps for the better part of this past year. In addition, a recent Pew study suggests the app has around 26 million users in the US. At almost $2 billion more than Facebook’s purchase of Instagram, Snapchat would be Facebook’s largest investment to date.
But is Snapchat really worth that much? To put things in perspective, Disney bought Marvel and LucasFilm for $4 billion each. With only one app and no income, what makes Snapchat so valuable to investors such as Facebook? Perhaps it’s the fact that Snapchat users send 350 million pictures a day—causing Instagram’s mere 55 million to pale in comparison. Or maybe it has to do with Facebook’s declining popularity among teens, whereas Snapchat is attracting teens by the millions.
Whatever the reason, Snapchat is certainly an app to keep your eye on in coming months.
What do you think? Is Snapchat really worth $3 or $4 billion? Should they have accepted the offer, or was rejecting it a good idea? Let us know your thoughts in the comments below!