Today, The Wall Street Journal is reporting that Snapchat turned down a $3 billion acquisition offer from Facebook. The offer was said to be a completely cash transaction, but Snapchat founder Evan Spiegel held out. Those familiar with the situation say Spiegel likely won’t consider any further offers until early next year.
In a time when social media has blossomed, and messaging services have dotted the landscape, Snapchat has emerged as a bright spot. It’s easy to use, and the messages disappear shortly after being read. The service can also be used to message groups, with messages being held on the servers for 24 hours, giving time for everyone to read them.
Also rebuffed was an investment offer from Tencent Holdings, a Chinese company that has interest in messaging platforms like KaKao and WeChat. Their offer was an investment of $200 million, with a valuation of Snapchat at $4 billion. In June, Snapchat raised $60 million in venture capital on the back of an $800 million valuation.
Three months later, Snapchat is reporting that their usage has doubled, and they’re up to 350 million “snaps” daily. Facebook understands the value of mobile when it comes to interaction, specifically messaging. Their Facebook Home messaging platform failed ot catch on widely, and was met with scorn, even with the well reviewed (and copied) Chat Heads feature. It’s also possible that Facebook would use the service for mass marketing, pushing advertisements to the mobile devices of users.
Should Snapchat seek an investor early next year, Spiegel tells investors he’ll seel a piece of his own stock holdings. A popular option now, services that balloon in popularity also have a tendency to hit a glass ceiling at some point. In the case of Zynga, getting too close to Facebook helped in their demise.