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Facebook reportedly offered $3B or more for Snapchat, was turned down

  • The WSJ reports Facebook (FB +3.1%) offered at least $3B for Snapchat in "recent weeks," but was turned down. The paper had previously reported of a $1B+ offer.
  • Snapchat co-founder/CEO Evan Spiegel is said to be unlikely to consider an acquisition at least until early next year, by which time he hopes further growth will allow for a higher valuation. Snapchat currently doesn't have any revenue.
  • Chinese messaging/gaming giant Tencent has reportedly offered to lead an investment round in Snapchat that would give the privacy-friendly photo-sharing platform a valuation of $4B (previous).
  • The latest report comes a couple weeks after Facebook disclosed it saw a Q/Q drop in U.S. teen DAUs, and amid general concerns Facebook engagement is declining among younger users who view it as more boring than other social media platforms that are more public-facing and/or support a greater degree of anonymity.
  • On the other hand, Instagram's popularity among younger U.S. users continues to grow.
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Comments (31)
  • Stone Fox Capital
    , contributor
    Comments (6175) | Send Message
     
    paying $4B for companies that don't have any revenue is a good sign that its concerned. The bigger issue though is that it will eventually be uncool to even be associated with FB.... a kiss of death. Instagram worked b/c FB was still cool at that point.
    13 Nov 2013, 02:21 PM Reply Like
  • Manitobatex
    , contributor
    Comments (653) | Send Message
     
    .................. rumor or hogwash. Snapchat is going to work this to their benefit.....only fuels the twitter like environment we now live in.
    13 Nov 2013, 05:57 PM Reply Like
  • AppInvestor
    , contributor
    Comments (252) | Send Message
     
    This bodes very well for companies in the mobile app area that aim to acquire millions of users such as MOBI, MM, KEYN, and others.
    14 Nov 2013, 02:31 AM Reply Like
  • Jjblanto
    , contributor
    Comments (18) | Send Message
     
    What good business isn't concerned about outside threats? For most businesses, especially in the tech sector, part of maintaining a competitive advantage is to remove these outside threats through either acquisitions or innovation. FB does both and will continue to do both. Who cares being "cool" other than the fickle teeny bop demographic? Teen usage on Instagram is increasing. Enjoy this short squeeze SFC.
    13 Nov 2013, 02:41 PM Reply Like
  • Matt Jonza
    , contributor
    Comments (86) | Send Message
     
    This anecdote is a far from statistically significant... but I am a 23 year old in MN. In the past year, more than 20 people I know have deactivated their FB account and do not plan on reactivating it. Just saying.... Facebook might have ran its' course in America. Myspace 2.0?

     

    The point is, everything in tech is a fad in some sense. I'm not convinced that Facebook has true staying power.
    13 Nov 2013, 03:06 PM Reply Like
  • Mongoose7916
    , contributor
    Comments (228) | Send Message
     
    Facebook got too big to ever go the route of myspace. They would have to make some insanely boneheaded moves in order to fade into oblivion. The cool factor in FB has long since been gone but since FB has so many people including baby boomers and their ilk it isn't going anywhere. That being said what most likely will happen is continued slowing new user growth and slowing hours per user for the next couple years and then declining hours per user after that time frame.
    13 Nov 2013, 08:06 PM Reply Like
  • gwynfryn
    , contributor
    Comments (4298) | Send Message
     
    Snapchat isn't that big yet, and could go south very suddenly, so I'd have taken the money; a bird in the hand, and all that. Besides, doesn't somebody with 3B$ have more worthwhile/interesting things to do than manage a fad web site?
    14 Nov 2013, 08:53 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8608) | Send Message
     
    I guess the fellas at SnapChat never heard about Yahoo! turning down MSFT's offer a few years back...

     

    How'd that turn out?
    13 Nov 2013, 02:41 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1277) | Send Message
     
    GRPN turning down $6B from google...
    13 Nov 2013, 03:18 PM Reply Like
  • gwynfryn
    , contributor
    Comments (4298) | Send Message
     
    Who GRPN? No; only kidding...
    14 Nov 2013, 08:54 AM Reply Like
  • idkmybffjill
    , contributor
    Comments (1669) | Send Message
     
    This kid is an idiot. He's going to regret this when the tech 2.0 bubble pops, and this revenue-less 'entity' is worth less than Facebook's first $1B offer.
    13 Nov 2013, 03:47 PM Reply Like
  • longday_trader
    , contributor
    Comments (52) | Send Message
     
    ITA--Snapchat's value will soon endure about as long as the pictures it transmits.
    13 Nov 2013, 04:48 PM Reply Like
  • NY2LA 1
    , contributor
    Comments (358) | Send Message
     
    I worked at a bubbly dotcom 1.0 firm, this kid will regret it but don't blame him most likely his VC partners twisted his arm. That's how I lost out, due to greedy Vic's not our management.
    14 Nov 2013, 10:39 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1669) | Send Message
     
    Bulls make money. Bears make money. Pigs get slaughtered.
    13 Nov 2013, 04:21 PM Reply Like
  • gwynfryn
    , contributor
    Comments (4298) | Send Message
     
    And somebody else takes home the bacon...
    14 Nov 2013, 08:56 AM Reply Like
  • mirage12
    , contributor
    Comments (98) | Send Message
     
    You gotta be crazy to turn down that kind of $$$$$. $3000 million. No thanks, I'll hold out for $4000. FB may be concerned but the valuation means that Instagram should be worth 2-3 times Snapchat. Bought for $1, now worth $6-10? Downside is the valuations are only based on a few companies buying them. Doubt Twitter will be scooping up a $4B photo sharing company any time soon.
    13 Nov 2013, 04:47 PM Reply Like
  • Bouchart
    , contributor
    Comments (776) | Send Message
     
    FB desperately trying to buy growth...
    13 Nov 2013, 05:44 PM Reply Like
  • Joseph Poma
    , contributor
    Comments (437) | Send Message
     
    There is nothing to worry about with Facebook. Instagram is huge among younger kids and so those "losses in DAU's" will be irrelevant once Instagram begins to be monetized in 2014. As a shareholder I am glad Facebook did not acquire SnapChat at such a lofty price. No revenues, as soon as ads appeared the youth base would rebel, and even with advertising, advertising rates on such a youth focused app platform would be well below what they are already receiving.
    13 Nov 2013, 08:18 PM Reply Like
  • Adriannzinha
    , contributor
    Comments (10) | Send Message
     
    Deja vu to the heady days of theglobe, pets.com, and that ilk. $3B USD for a glorified chat app for teens? That's one offer I'd have sprinted, not run or walked to take for snapchat mgmt.

     

    I too think the FB cycle is start to run its course. Sure it is anecdotal but I ditched FB and know of so many people who either have outright cancelled or check their accounts occasionally. I can't quite put my finger on it but I perceive a sort of social media fatigue. There's a whole phenomenon of heavy users of social network sites like FB correlating with depression.

     

    Maybe the FB content itself is frankly quite dull. Most people aren't that interesting with social networking tropes becoming well established (a) look how great I am, life is perfect, (b) drama/attention-seeking.

     

    FB as a company may be able to turn to other avenues via acquisitions but the whole FB page thing feels tired.
    13 Nov 2013, 09:18 PM Reply Like
  • alxacid
    , contributor
    Comments (10) | Send Message
     
    Perhaps he should have sold for $3B, I know I would have. I can't imagine how SnapChat would monetize their user base without some interesting technology, the likes of which Facebook most likely possesses (image recognition).
    13 Nov 2013, 10:24 PM Reply Like
  • gwynfryn
    , contributor
    Comments (4298) | Send Message
     
    Ads which self destruct in ten seconds, would be a good start?
    14 Nov 2013, 08:57 AM Reply Like
  • Julian Acosta
    , contributor
    Comments (128) | Send Message
     
    I predict SnapChat's popularity will drop off like a cliff. Another new wave of apps will come soon and be the new hot topic.
    13 Nov 2013, 10:38 PM Reply Like
  • J to the B
    , contributor
    Comments (6) | Send Message
     
    I completely disagree with some of the comments about FB having run its course. Run its course? They hold 1/7th of the world population!! I can't imagine MySpace was anything close to that number.

     

    FB is simply maturing as a company. It's a social network where people stay in touch, share information, etc. That's probably not going away.

     

    Younger people aren't clamoring to it, because it's a mature product their parents use. The younger generation wants something a little different and don't want to be associated with something their parents are using. But, not all young people are doing that. There are plenty of younger people using FB, and there always will be.

     

    Facebook isn't scrambling by attempting to buy Snapchat, they are simply expanding to include a different demographic. It's a smart move to acquire a product like Snapchat.

     

    I use FB every single day, and I likely always will. It's a way to engage with friends all over the world.

     

    13 Nov 2013, 10:56 PM Reply Like
  • Chiipy-Nostradamus
    , contributor
    Comments (99) | Send Message
     
    Every little social media company thinks it can go public at a mkt cap of 10's of billions of $. This is a pipe dream, and brings back memories of the early 2000's where all you did was build a simple web page, call your company "X dot com" and presto, you had a $ 200 stock price !!
    14 Nov 2013, 09:11 AM Reply Like
  • mirage12
    , contributor
    Comments (98) | Send Message
     
    Just turned down $4B from Google
    15 Nov 2013, 11:42 AM Reply Like
  • gwynfryn
    , contributor
    Comments (4298) | Send Message
     
    Got a link for that, mi?
    16 Nov 2013, 08:32 AM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1264) | Send Message
     
    According to Yahoo ? they say the CEO of Fb earned a record 2.3 billion in compensation in 2012 :
    http://yhoo.it/1ealNLY

     

    Is that possible ? 2.3 billion ?

     

    For a site designed for school mates to see other school mates ?

     

    Zuck never had the great vision of FB becoming what it had become, so does he deserve all the pie ?
    16 Nov 2013, 02:37 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1669) | Send Message
     
    Jack Daniels, you might be drinking a little too much Jack Daniels. Learn to read - it was the stock he sold to primarily cover his taxes from the IPO.
    16 Nov 2013, 07:58 PM Reply Like
  • Manitobatex
    , contributor
    Comments (653) | Send Message
     
    Snapchat & money have a common denominator i.e. they both disappear in a few seconds.
    Snap chat users have already made headlines......& it's not good !!!
    17 Nov 2013, 02:33 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1948) | Send Message
     
    WP: A Snapchat security breach affects 4.6 million users. Did Snapchat drag its feet on a fix?

     

    http://wapo.st/1lB0MLL

     

    LOL...
    1 Jan, 07:53 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1948) | Send Message
     
    WP: "Snapchat has clammed up after being hit by hackers. That’s not good."

     

    http://wapo.st/1bCoMZh
    2 Jan, 03:43 PM Reply Like
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