Snapchat In Talks For A $10 Billion Deal

Ephemeral Messaging App Goes After Hard Cash 

Last year, Snapchat turned down a $3 billion offer for their company from Facebook. A little while later, they turned down a $4 billion offer from Google (note: the Snapchat ‘company’ is essentially just 24 year old CEO Evan Spiegel and co-founders Reggie Brown and Robert Murphy, plus around 30 employees). Considering Instagram accepted a paltry $1 billion dollar offer from Facebook back in 2012, people were somewhat disbelieving that Spiegel would walk away from those sorts of numbers.

Also important to note at this point is that Snapchat has never made a single dollar of profit in its entire existence, and still operates funded entirely by investors.

It seems that Spiegel saw something no one else did, however. A group of investors including the giant Alibaba – essentially the Chinese version of Amazon – are reputedly in talks with Snapchat to finance a deal which would value the app at around $10 billion. For comparison, Burger King is worth around $9.3 billion, and it costs just over $2 billion to build and launch a Space Shuttle.

The statistics surround Snapchat are, admittedly, impressive. While the app’s total number of users are a closely guarded secret, estimations put it at around 60 million total installs, with 16.5 million people using the app on a daily basis. 23% of 18-29 year olds – far and away the most desired demographic for advertisers – have Snapchat. 400 million Snaps are sent every day, with 1 billion Stories being viewed each day. Additionally just 1% of marketers use Snapchat, and they have to do it the same way as everyone else: accruing followers manually – there is no function for promoted Snaps as of yet.

MTV did use Snapchat to reveal their nominees for the Video Music Awards, with eight ten second videos being available to view by MTV’s followers on Snapchat for 24 hours. This leveraged the large fan bases of individual stars on MTV’s shows by featuring cameos from those actors in the announcements. The power of celebrity holds sway as much on Snapchat as it does on platforms like Instagram or Twitter – a highly valuable commodity.

Perhaps Snapchat’s most valuable asset is the very sense of independence which is at stake here. Both Instagram and Facebook have launched their own self-deleting photo messaging apps recently – Bolt and Slingshot respectively – but they failed to gain much traction, perhaps because people are increasingly distrustful of these social media behemoths and the buckets of personal information which they already hold on us.

One cannot help but imagine that if Snapchat were to be sold to some international conglomerate and started being peppered with ads, it wouldn’t take long for people to migrate to one of the myriad alternatives. What makes Snapchat appear so valuable is that it seems to inspire that most elusive of qualities, loyalty.

But in the digital age, in the age of the disappearing message and endlessly scrolling news feed, there is no such thing as loyalty – there is only convenience. And now seems like a very convenient time for Spiegel and his crew to collect their bounty and retire to their private island before their ten seconds on the screen is up.

Douglas Clarke-Williams

Douglas is an English Literature graduate who has written about everything from music to food to theatre, now a content creator for Social Media Frontiers. No topic too large or too small. Follow him @DouglasAtSMF.

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