The downloadable app Snapchat has been growing exponentially since its release two years ago. It currently has exactly $0 in revenue but has just been offered a staggering $3 billion by Facebook. The deal was said to be an all-cash venture. The founder of Snapchat is 23-year old Evan Spiegel and he has refused Facebook’s billion dollar offer.
With such an enormous amount of money why would a 23-year old not become a billionaire? Given that Snapchat is still on the rise it is entirely possible that waiting longer will result in a larger offer from Facebook. Just one year ago Facebook tried to buy Snapchat for $1 billion, reports the Wall Street Journal. After only one year the offer is tripled and is now $3 billion. If Snapchat continues to attract attention who knows how much it could be worth a year from now.
Why is Facebook offering so much for something that isn’t making any money? Just last year Facebook bought Instagram for $1 billion, which like Snapchat, wasn’t making any revenue. According to the Pew study 18 percent of mobile phone have Instagram while Snapchat has half that amount. More recently Facebook has been losing members. Is that tied to the jump in Snapchat members? Well, Facebook has become much more noticed by parents and authorities than in the past and Snapchat is an app that promotes secrecy. The way Snapchat works is you can take a ten second picture or video and after the allotted time it is gone, poof.
Snapchat started small, in June it had 200 monthly users but by September the number of users jumped all the way up to 350 million. The simple interface of the app allows for easy use. The app works similar to Instagram, letting you take pictures but once a picture is sent via Snapchat it is gone forever. What if you take the greatest picture ever in Snapchat and want to keep it? Before you send your pictures or videos you have an opportunity to save them to your phone. Problem solved.
Snapchat is available on smartphones including Android devices and iPhones. The app is of course free. Part of the reason that Snapchat has grown so strong is because it feeds off of having more members. If you have two friends on Snapchat you might not being using the app very much but if over time more of your friends download the app and add you then not only does your list of friends expand but so does their list. If you have more friends then you can send snaps to more people and will likely receive more due to the amount of people sending snaps to you.
With the world jumping on board is Snapchat on the fast track to success? Only time will tell if Snapchat can continue to grow in popularity or crumble under its own weight. Maybe it’ll be bought out before either happen but with Spiegel’s commitment maybe Snapchat will refuse future Facebook offers, even if they grow beyond $3 billion.
By Garrett Jutte