Just when photo sharing service Snapchat started hunting around for a spare $200 million in funding, The Wall Street Journal reported that Facebook’s CEO, Mark Zuckerberg, had made an offer upwards of the $1 billion dollar mark – the amount Facebook paid out for Instagram the day after the company went public.
Snapchat blew off Facebook’s offer and the social network has promptly gone on the defensive, telling The Wall Street Journal that it doesn’t respond to rumours or speculation. At least not while Zuckerberg is licking his wounds and planning for the second round.
The similar $1 billion deal with Instagram was said to be a move that could help boost Facebook’s staying power, as the social network morphs into the ageing giant of the social blogging world. No one wants another incident like Myspace and Facebook has hit saturation point with acquiring new users. Everyone is on Facebook – which, some reports say, is a turn off in itself for younger users – and unless Zuckerberg finds a new audience soon they won’t be able to fit many more seats around the table.
Our bet is that Facebook will be looking to initially bring Snapchat under the Facebook company umbrella, with the likes of Instagram, and slowly morph the technologies together. We’ve already seen this when Facebook launched Snapchat’s twin Poke last year. Facebook wants to become the one-stop-shop for all things social media.
If reports of Facebook’s offer are true, it would mean Snapchat would join the ranks of tech companies like Instagram, Pinterest, Uber and Waze, both purchased despite not having significant revenues. But given Snapchat’s recent valuation of up to $3.5 billion, Facebook’s offer isn’t as incredible as it might first appear.
After all, only a few years ago early valuations on Twitter were seen as too hefty, a stab in the dark for a frivolous messaging platform in 140 characters or less. But today, Twitter’s IPO values the company somewhere near the $11 billion dollar mark. That little blue bird did well for itself and now Snapchat looks to be following suit – albeit without Facebook’s assistance for now.
In September, Snapchat’s CEO and co-founder of the company, Evan Spiegel, reported 350 million messages were sent through its app each day, an enormous increase of 75 per cent since June, where the number was closer to 200 million. Snapchat is evolving at a rapidly accelerating rate and it’s little wonder the company is now looking to establish itself by following in the steps of Twitter to see just how high it can climb.
Or just how much Facebook is willing to pay for the little photo messaging app that could.
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