Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
World Wide Web
24/7/365 Network Uptime!
Average Rating:
Rate this article:  
Will Snapchat Survive Without Facebook
Will Snapchat Survive Without Facebook's $3B?

By Jennifer LeClaire
November 14, 2013 10:05AM

    Bookmark and Share
Stunning is the only way to describe Snapshot CEO Evan Spiegel's rejection of Facebook’s offer of $3 billion in cash. Passing on the Facebook deal could come back to haunt Snapchat. It’s like déjà vu of 1999 all over again, irrational exuberance over products with no redeeming value. Snapshot probably has a "now you see it, now you don't" future.
 



Remember the Internet bubble when venture capitalists were throwing cash against online startup walls to see what would stick? Apparently, Snapchat remembers those days and is holding out for a big payday.

But will Snapchat, the mobile app that lets you send photos that appear for 10 seconds or less to your friends, live to regret its decision to snub a $3 billion acquisition offer from Facebook? Some industry watchers think so. Others don’t.

According to the Wall Street Journal, the 23-year-old CEO of Snapchat rejected the $3 billion buyout offer despite the fact that the two-year-old social media phenom has zero revenue to build on. Apparently, Evan Spiegel thinks he can do better with one of his other suitors, like Tencent Holdings. The Chinese Internet giant previously offered to lead an investment that would value Snapchat at $4 billion.

Believing in the Vision

Neither Facebook nor Snapchat could immediately be reached for comment. Snapchat, though, is not without funding. Lightspeed Venture Partners, Benchmark Capital, SV Angel, General Catalyst Partners, and Institutional Venture Partners led a round of funding that raised about $73 million.

But with Instagram grabbing $1 billion from Facebook in 2012, some are questioning the wisdom of Spiegel declining an offer three times that size for an app that’s less established. Julie Ask, an analyst at Forrester, pondered Snapchat’s rejection in a Forbes column:

“There could also be some technology, patents and people in the mix -- but less likely though possibly to be the drivers of billions in valuation at an early stage,” she said. “The founders most likely have a belief or a vision of great things to come -- it’s at the heart of why entrepreneurs do what they do.”

Déjà vu of 1999?

We asked Marcus Nelson, former director of Social Media at Salesforce.com and CEO of Addvocate, a social platform for empowering employees to build brands, for his take on the Snapchat shun. He told us Snapchat's stunning rejection of Facebook’s offer of $3 billion in cash is just that: stunning.

“Because it's being courted by a bevy of VC firms and cash-flush technology companies, it’s like déjà vu of 1999 all over again, irrational exuberance over products with absolutely no redeeming value,” Nelson said.

Nelson sees Snapchat’s move as similar to Chatroulette and the ghosts of other management teams that thought their products were the next big things. In other words, passing on this deal may come back to haunt Snapchat.

“While Facebook sees inherent value in acquiring Snapchat in an attempt to win back the younger demographic that's now steering away from its own platform, one has to question how a mobile image-sharing app that erases images seconds after you receive is anyone’s idea of a killer app,” Nelson said. “I believe the company has a ‘now you see it, now you don't’ future."
 

Tell Us What You Think
Comment:

Name:

Amadeu Peixe:

Posted: 2014-01-20 @ 7:08am PT
What I will say is that I would have accepted! I presented this idea in March 2006 to a group of Portuguese investors, who did not believe in its potential; (



Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.


 World Wide Web
1.   Wall Street Journal Hacked Again
2.   Internet of Things Comes to DIYers
3.   Social Media Haters Speak Up
4.   New Technology Defeats Privacy Efforts
5.   Verizon Launches Rewards Program


advertisement
Radical.FM's Freemium Biz Model
Online radio startup asks for donations.
Average Rating:
Facebook Social Experiment Irks Us
Secretive test was legal, but ethical?
Average Rating:
Social Media Haters Speak Up
Survey says, now showing a little love.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Wall Street Journal Hacked Again
Hacked again. That’s the story at the Wall Street Journal this week as the newspaper reports that the computer systems housing some of its news graphics were breached. Customers not affected -- yet.
 
Dropbox for Business Beefs Up Security
Dropbox is upping its game for business users. The cloud-based storage and sharing company has rolled out new security, search and other features to boost its appeal for businesses.
 
34 European Banks Hit by Android-Skirting Malware
Criminals have been finding gaping holes in Android-based two-factor authentication systems that banks around the world are using. The result: 34 banks in four European countries have been hit.
 

Enterprise Hardware Spotlight
Microsoft Makes Design Central to Its Future
Over the last four years, Microsoft has doubled the number of designers it employs, putting a priority on fashioning devices that work around people's lives -- and that are attractive and cool.
 
Contrary to Report, Lenovo's Staying in Small Windows Tablets
Device maker Lenovo has clarified a report that indicated it is getting out of the small Windows tablet business -- as in the ThinkPad 8 and the 8-inch Miix 2. But the firm said it is not exiting that market.
 
Seagate Unveils Networked Drives for Small Businesses
Seagate is out with five new networked attached storage products aimed at small businesses. The drives are for companies with up to 50 workers, and range in capacity from two to 20 terabytes.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.