Snapchat Turns Down Facebook
In December of last year, 23-year-old co-founder of Snapchat Evan Spiegel reportedly turned down a $3 billion cash acquisition offer from Facebook. In the same week, rumour has it he also turned down $4 billion offered up by Google. But will he be remembered as the boy who lost billions or as the man who took Mark Zuckerberg’s crown?
Snapchat Rises to Dominance
Founded by Evan Spiegel and Bobby Murphy in 2011, after a regretfully sent photo message, Snapchat is a mobile app that lets users send photos, videos and messages that disappear in less than 10 seconds. This newest and coolest social media app for the young has to date raised nearly $94 million in venture funding. And whilst stats are not provided on how many people use the app, Snapchatters globally are sharing 350 million photos per day.
Crazy or Stupid?
But for a two-year-old app, with no current revenue stream (and no timetable to introduce one), to turn down a billion dollar bid seems almost unbelievable. Some speculate that he’s greedily holding out for a bigger offer. Others claim he’s simply young and stupid. Some say his privileged upbringing – as a teenager he asked mummy for a BMW and she simply said yes – has left him with no concept of money. But perhaps he actually sees himself as the new social media sensation.
Battling with Facebook
As Spiegel recently reported in a lengthy interview with Forbes, Zuckerberg‘s Snapchat courtship originally began in 2012. But at a meeting scheduled ‘to get to know one another’ in Spiegel’s hometown of Los Angeles, Zuckerberg revealed Facebook planned to release a nearly identical app just a few days later. “It was basically like, ‘We’re going to crush you,’” Spiegel said.
But that app was Facebook Poke, and within three days of its launch Snapchat was back ahead on the iPhone app store. Poke is now out of the top 30.
And as Snapchat gains its momentum with the young, some evidence suggests Facebook is losing its grip on the teen market. The Global Social Media Impact Study 2013, a 15 month study conducted across 8 countries, claims Facebook has become “uncool”. It reports the 16 to 18-year-olds who are flocking to Twitter, Instagram, Snapchat and WhatsApp consider Facebook to be “dead and buried”. In October of last year, Facebook CFO David Ebersman himself even admitted to a decline in teenage use. Maybe Spiegel thinks he’s got Zuckerberg on the run.
Building a Future
But at Snapchat, they still have work to do. They must find a revenue stream. They must fight off the ever-increasing competition. And they must maintain their cool factor at the same time.
And, they must attend to their security. A recent data breach, which saw the phone numbers and usernames of 4.6 million accounts publically revealed, has in turn revealed a weakness of their own. Anonymity and transience are the key components for Snapchat’s success. Without attending to that first, Spiegel risks forever being known as the boy who lost $4 billion.