Two-year old photo-messaging application Snapchat has rebuffed a buyout offer worth $3 billion from social media giant Facebook. Early this year, Facebook is said to have made an offer of $1 billion to acquire the company. That is twice the amount it paid for Instagram.
Zuckerberg has been quick to snap up companies he views as competition. Instagram’s photo-sharing popularity, especially on smartphones had given the FB founder sleepless nights. He seems to be threatened by Snapchat’s fast-growing user base, though the company is reportedly making a loss and valued at just over $4 billion. It has more than five million active users and is downloaded by 9% of mobile users based in the United States.
Snapchat is the brainchild of two Stanford University students Bobby Murphy and Evan Spiegel. The application allows users to take photos, record videos and add drawings and text, and send them to a list of recipents. These photos or ‘snaps’ can be viewed for a specific amount of time before being hidden from the recepient’s device and deleted from Snapchat’s server. While the app is quite notorious for its use in sexting and best known for selfies, it nevertheless handles more than 350 million messages a day. Snapchat’s main demographic comprises users aged between 13 and 23 years, and of late, the 40+ crowd. It is common knowledge that photos and videos are popularly shared in the online social space, on desktop and portable devices. They are also increasingly being integrated into content marketing campaigns.
Facebook’s desire to control and leverage companies it views as a threat can be examined from a strategic and monetary point of view. But the value of the acquisitions is not very evident, as is the case with Instagram.
Snapchat’s 23-year old CEO Evan Spiegel is said to be waiting until next year in the hopes of a higher valuation. Other reports suggest that Spiegel has big plans for Snapchat in the works. It is to be seen if Facebook continues its pursuit or sets its eyes on another company.