Evan Spiegel: Facebook offered Snapchat's 23 year old $3 billion, he turned down
By FnF Desk
PUBLISHED: Nov 14, 2013, 11:28 am IST | UPDATED: Nov 14, 2013, 11:36 am
Keywords: Evan Spiegel Who is Evan Spiegel Facebook Facebook offer Snapchat's Evan Spiegel Snapchat Snapchat's founder Facebook's $3 billion offer
LA: Facebook may be losing teens, because they don’t want to post personal status updates on a site that broadcasts everything to their parents, grandparents, teachers, and future college admissions officers.
Evan Spiegel, Snapchat’s 23-year-old co-founder and chief executive, is unlikely to consider an acquisition or an investment until early next year, people briefed on the matter said.
They said Mr Spiegel is hoping Snapchat’s numbers – of users and messages – will grow enough by then to justify an even larger valuation.
The messaging app Snapchat, meanwhile, is rapidly gaining teens, because it allows them to send photos and messages that self-destruct after a few seconds. It’s not a huge surprise, then, that Facebook tried to buy Snapchat.
The surprise is that, according to the Wall Street Journal, it offered $3 billion—and Snapchat turned it down. From the WSJ:
Evan Spiegel, Snapchat’s 23-year-old co-founder and CEO, will not likely consider an acquisition or an investment at least until early next year, the people briefed on the matter said. They said Spiegel is hoping Snapchat’s numbers—of users and messages—will grow enough by then to justify an even larger valuation, the people said.
Snapchat, it behooves me to point out, makes no money. I don’t mean that it is spending more money than it takes in, like Twitter. It literally does not have any revenue.
That in itself doesn’t mean it lacks value. Plenty of huge tech companies, from Google to Facebook to Twitter, have started out by simply offering a popular service, then figured out how to make billions later on. Instagram was not making revenue when Facebook acquired it for $1 billion a year and a half ago. Now it is.
The thing about Snapchat is that it’s hard to see how it could ever make billions of dollars, given the ephemerality of its messages and its young target demographic. My former colleague Farhad Manjoo put the question to his Twitter followers, asking, “Someone tell me even a halfway plausible way Snapchat can make any money.” Here are a few of the more imaginative responses:
Save all the pictures/chats, threaten to post them unless people pay up? OK, so let’s admit that “advertising” is plausible. And let’s stipulate that while we’re all laughing at Spiegel today, there’s at least some possibility that he’ll be the one smirking last, Zuckerberg-style, when Snapchat becomes the world’s next social-media giant.
But man, it sure seems like the chances are far greater that he’ll someday sit down for an interview with Esquire or Businessweek and reflect ruefully on just how and why, in his exuberant youth, he passed up the sweetest deal any 23-year-old startup founder is likely ever to see. #Source: The State.com