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Snapchat Supposedly Turned Down a $3 Billion Acquisition Offer from Facebook

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When Facebook spent the staggering amount of $1 billion on the Instagram acquisition, people the world over thought they were crazy for throwing that kind of money on an app that, at the time, hadn’t generated any revenue.

Well, that acquisition turned out pretty well for CEO Zuckerberg, who has since allegedly turned his sights on Snapchat, only to have an even more ludicrous offer spurned. How much more ludicrous, you ask? Apparently, Snapchat recently turned down a $3 billion offer from the social media giant.

The report comes from The Wall Street Journal, whose sources claim that this is, in fact, the second time that Facebook has made a billion-dollar plus offer to Snapchat and been turned down.

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Snapchat CEO and founder Evan Spiegel (pictured above) has allegedly been approached by Mark Zuckerberg once before, only that time he only had to resist $1 billion worth of temptation. Spiegel believes the company still has plenty of room to grow on its own, and according to the Journal’s sources won’t consider selling until early 2014 at the earliest.

Still, it can’t have been easy for 23-year-old Spiegel to say no to $3 billion, especially since Snapchat is in the same boat as Instagram was when Facebook came knocking: they have no revenue to their name.

Snapchat has been valued by some at $4 billion, so maybe Spiegel is waiting for that figure to cross his desk. The question now is whether Facebook — who already tried to steal some of Snapchat’s thunder with the Poke app — will come knocking again next year when Spiegel is more likely to consider acquisition. And if Zuckerberg does try again, how much will he offer the third time?

(via Wall Street Journal via Engadget)


Image credit: Photo illustration based on Money Dollar by 401(K) 2013 and Evan Spiegel, Snapchat by jdlasica


 
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  • Vlad Dusil

    Absolute lunacy. Talking about a $4bil valuation for something that doesn’t generate any revenue and where most of the content is comprised of d*ckpics and bewbshots.

  • Carl Meyer

    It’s not the app what has value, it’s the user data.

  • http://www.intensitystudios.com/ Antonio Carrasco

    It’s cool, the tech industry is fixing to crash again, so they will get what’s coming to them.

  • delayedflight

    It’s the install base that Facebook wants and also as Carl mentioned the user data is what spins revenue for the likes of Facebook.

  • nikonian

    Evan Spiegel Is a smart man. Most successful web sites and even not so successful startups slow when bought out and are killed off…

  • http://www.sin3rgy-creative.com/ David Liang

    The problem with that kind of valuation is that it’s based on something very sensitive to fads. If or even “when” another platform pops up and it will that takes users away from snapchat, the next off they get if they get one might be far lower.
    The problem with the data mining business is there’s always someone right behind you, the smart ones will sell or merge into a larger stable entity like Yahoo, Facebook or Google.
    In fact if they can’t monetize their investors will get more involved and that will ruin a companies direction.

  • herzco

    Obviously Evan Spiegel has never read any of Aesop’s fables….

  • Sky

    With $3 billion in my pocket I wouldn’t worry about that.

  • Coop

    I cannot believe anyone would thing this app is worth that much, how stupid are people?? I mean it’s an app.. that lets you send horribly compressed pics/video, only just taken, to strangers, and the gimmick is that they disappear. Also there isn’t even a way to access strangers really, so I guess you just send private pics to people you know.

  • http://blog-artema.ru/ Артём Черкасов

    Good photos.

  • prometheus1010

    What user data? The whole point of snapchat is that it is ephemeral and permanently deletes all snaps.

  • araczynski

    not sure who is stupider, Z for offering/grasping at straws, or S for turning it down due to some delusional visions of grandeur/self importance. well, wisdom does come with age supposedly, looks like neither of the two crossed that boundary yet.

  • Jordan Butters

    The value isn’t in the app, it’s in the user base and marketing potential. Apparently 350 MILLION images are shared daily via SnapChat. That’s a lot of ad potential.

  • Lawrence DeVore

    Facebook only gave them 3 seconds to decide.

  • Coop

    I can’t accept the fact that that many people use this app.. It’s like millions of people paying a lot of money for an object that’s useless, and money is being made from it but no one knows why.

  • le sigh

    someone doesnt understand technology if they believe that crap ;)

  • brokelyfe

    which is why you will NEVER have any billions in your pocket. believe dat!

  • reality sucks

    your inability to accept reality has no bearing on reality, so shut up idiot!

  • Eugene Chok

    i bet you also didn’t believe the NSA spied on US citizens till recently or that apple isn’t storing all that biometric data…

  • tekmonkey

    Ive never heard of Snapchat until reading this article.

  • Jordan Butters

    But Snapchat is free, so millions aren’t paying for it. It’s a fairly simple concept – the user gets a free app that, albeit useless to you, some people might find fun to use. The app developers get a huge database of people to which they can sell advertising space to appeal to.

    The appeal to the big Z? Maybe he wants to use the technology to develop a Facebook add-on. Maybe he wants to close it down to boost a future feature or app he’s got planned? Or maybe he just wants to add that database of users to his huge collection of users he already has through Facebook and Instagram.

  • nikonian

    Is life merely about money?

  • SiriusPhotog

    Yeah but FB probably already has all that user data. I mean, how many SnapChat users do you think there are that are not also Facebook members? What’s to gain? And I agree with Vlad, $4b for a company with Zero revenue??? This world is f*cked up.

  • http://barbadosmaney.ru/ Андрей

    Yes, the amount is very large, but the project is good