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SnapChat Turns Down $3 Billion Offer From Facebook

samzenpus posted about a year ago | from the no-deal dept.

Businesses 188

Dr Herbert West writes about a reported $3 billion offer from Facebook that Snapchat CEO Evan Spiegel turned down. "Snapchat, a rapidly growing messaging service, recently spurned an all-cash acquisition offer from Facebook for close to $3 billion or more, according to people briefed on the matter. The offer, and rebuff, came as Snapchat is being wooed by other investors and potential acquirers. Chinese e-commerce giant Tencent Holdings had offered to lead an investment that would value two-year-old Snapchat at $4 billion. Evan Spiegel, Snapchat’s 23-year-old co-founder and CEO, will not likely consider an acquisition or an investment at least until early next year, the people briefed on the matter said. They said Spiegel is hoping Snapchat’s numbers – of users and messages – will grow enough by then to justify an even larger valuation, the people said."

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And the bubble grows larger (4, Insightful)

OverlordQ (264228) | about a year ago | (#45420335)

~nt~

Re:And the bubble grows larger (1)

Zontar The Mindless (9002) | about a year ago | (#45420537)

Never heard of SnapChat before.

But for some reason, I find myself now wondering whether "ChatFish" is still available for trademark use, and what I would do with it if I had it.

Re:And the bubble grows larger (1)

Zontar The Mindless (9002) | about a year ago | (#45420545)

Nevermind [angel.co] .

My children are using it (4, Insightful)

Anonymous Coward | about a year ago | (#45420613)

Never heard of SnapChat before

I've heard of it because my children are using it

It's basking in it's 15-minute worth of glory

If that guy isn't selling now, I don't think he will have a lot of time left before someone deflate that 3Billion price tag

Re:And the bubble grows larger (0)

Anonymous Coward | about a year ago | (#45421811)

Slashdotter is out of touch: News at eleven!

SnapChat Roulette (4, Funny)

goombah99 (560566) | about a year ago | (#45420563)

Images you can't forget but can't see after 30 seconds.

Re:SnapChat Roulette (2, Informative)

Anonymous Coward | about a year ago | (#45420665)

But contain pictures of people connected with the phone owner, GPS info, possible objects of interest to the person taking or receiving the pictures, possibilities of marketing campaigns with the best SnapChat evolving product X, etc... There's a lot you can do with it if you look beneath the surface. A small SnapChat app update lets them data mine everything in your phone.

Re:And the bubble grows larger (1)

rvw (755107) | about a year ago | (#45420705)

Actually, it doesn't grow larger. If they had accepted the offer, then yes. Now it's just waiting and hopefully we'll see this specific bubble snap soon enough.

Re:And the bubble grows larger (2)

Somo Pailin Oeshidez (2961163) | about a year ago | (#45420727)

They should taken the offer before everything goes *pop*.

Re:And the bubble grows larger (2)

SpzToid (869795) | about a year ago | (#45421291)

It's ok. Evan Spiegel is 23 years old. He's got his whole life ahead of him. He'll bound to learn from this one way or the other. (And failure, should it happen, is good, right?)

Kudos for not selling out to Facebook! That took a lot of balls to walk away, leaving all that money on the table. The world is probably a better place for it. I still wish Skype hadn't been sold to Microsoft.

Re:And the bubble grows larger (2)

JaredOfEuropa (526365) | about a year ago | (#45421771)

I doubt that SnapChat will gain significantly more value in the future, FB (or other already-popular networks) can simply roll out a similar service and crush them. And the success of social apps like these is not due to any brilliant little invention, the founder's marketing savvy, or flawless execution. These are factors, but the biggest factors a luck and timing (which also involves a great deal of luck). I don't think Zuckerberg would have stumbled on a new grand success if he had sold out FB early on, and I doubt Spiegel will have another success despite the experience he's gained from this. At best he'll attach himself to some up-and-comer; his media exposure may add some value there.

Re:And the bubble grows larger (1)

AlphaWolf_HK (692722) | about a year ago | (#45421145)

Snapchat sounds kind of like the antithesis of facebook. Facebook wants to keep a permanent record of everything you ever do, whereas this is more about quickly sending information and then redacting it (redacting because you can't erase it from the person's brain without the use of an amnesia ray.)

Re:And the bubble grows larger (4, Insightful)

Dr_Barnowl (709838) | about a year ago | (#45421551)

Who says they don't? The client deletes the photos. What the server does with them is a trade secret.

Facebook may well have thought $3B an excellent deal to expand their social graph database with all the photos you DON'T post to Facebook because they are too private...

Re:And the bubble grows larger (1)

Talderas (1212466) | about a year ago | (#45421575)

Precisely. Snapchat is everything Facebook doesn't want. It's in Facebook's interest to buy it up and shelve it.

No Kidding (1)

Greyfox (87712) | about a year ago | (#45421461)

I'm pretty sure you could put together a damned fancy chat system for a lot less than 3 billion dollars. Assuming you didn't just want to throw together an IRC or jabber server. Of course, they're more after the established user base, which they will start alienating as soon as they acquire the company. It'd be a bit harder to jam advertisements down the throats of users on IRC or Jabber.

I'm also pretty sure you could buy a number of companies with actual tangible assets and much more interesting IP for a lot less than 3 billion dollars, too.

Re:No Kidding (2)

Charliemopps (1157495) | about a year ago | (#45421647)

They're buying the users, not the application. My guess is those users fit a demographic that Facebook is lacking in.

How's that tech bubble working out for you? (5, Insightful)

Anonymous Coward | about a year ago | (#45420339)

Zynga, Instagram, Twitter, Snapchat, Skype, and the list keeps on growing.

Investors know the price of everything and the value of nothing.

Re:How's that tech bubble working out for you? (3, Insightful)

Mitreya (579078) | about a year ago | (#45420525)

Zynga, Instagram, Twitter, Snapchat, Skype, and the list keeps on growing.

I think you forgot Facebook :)

Investors know the price of everything and the value of nothing.

Big investors that got preferential price (and early access to all relevant information) made out just fine. The mere mortal investors might lose money, but that's a feature, not a bug.

They're trying to be the next Groupon! (4, Insightful)

billstewart (78916) | about a year ago | (#45420837)

Google reportedly offered Groupon $6B and was turned down; the company's probably worth about $6 by now.

Facebook offered SnapChat $3B? As long as it's in cash, not Facebook stock, there's only one right thing to do, which is to take the money and run. (Or take the money and stick around, if that's the deal, but take the money. Do not play Go, Do not pass up $3B.

Re:They're trying to be the next Groupon! (2, Informative)

rodrigoandrade (713371) | about a year ago | (#45421255)

Groupon is worth US$6.86 billion right now. In hindsight, turning Google's offer down was a wise move.

https://www.google.com/finance?q=NASDAQ%3AGRPN&ei=0KyEUrHVCMGUsgfcSA

But please don't let facts get in the way of your anti-capitalist parade.

When you're offered an obscene amount of money for your property, you don't just blurt out a Yes or No. You consult with lawyers, accountants, CFAs/CFPs, etc. before making a decision.

Re:They're trying to be the next Groupon! (4, Insightful)

Anonymous Coward | about a year ago | (#45421345)

Right, because market cap is be-all and end-all metric of company's worth, especially when considering acquisition.

Re:They're trying to be the next Groupon! (0)

Anonymous Coward | about a year ago | (#45421781)

Market cap is the price at which you could aquire a public company... how else would measure it's worth?

Re:How's that tech bubble working out for you? (1)

thegarbz (1787294) | about a year ago | (#45421141)

How much are your eyes worth?

Is it really a bubble and are these people really undervalued? All of these services boast hundreds of millions of active uses each month. That's a lot of potential eyes. For an advertising opportunity how much are those eyes actually worth? 1c each? 10c each? How many companies would line up to advertise to such a wide user base?

Some of these companies have no income now, but they have a HUGE user base. If it can be monetised with advertising there'd be massive earning potential.
The other interesting one in your list is Zynga. It has an equity of $1.5bn. That may sound massive for a small company but this is also a company which managed more than $1bn in revenues in one year so if anything it sounds like it's currently being undervalued.

Re:How's that tech bubble working out for you? (0)

Anonymous Coward | about a year ago | (#45421193)

Zynga managed $1bn in revenues, while managing $-400mln in net income - I don't think they're doing too good there.

That silly "Active users === Profits" meme doesn't seem to be quite working out for all those upstarts^Wstart-ups with business plans like "Provide free service - Grow user base - ??????? - PROFIT!"

Untargeted ads are helluva cheap now and users of a _privacy-oriented_ messenger service do not seem to be a prime material for behavior data harvesting.

Re:How's that tech bubble working out for you? (3, Interesting)

afxgrin (208686) | about a year ago | (#45421539)

From what I can see, Snapchat has no revenue. They don't get anything, zero, ziltch - unless image EXIF data is worth something. No ads, no software sales (it's free!). Unless they've been saving on their servers every single pic/video sent from people's phones to later use for extortion I'd say they are pretty worthless besides a user base that's already installed on Facebook.

The user base would likely go into free fall if Facebook took them over anyway, because we absolutely know those guys would archive every single piece of information.

Re:How's that tech bubble working out for you? (1)

JaredOfEuropa (526365) | about a year ago | (#45421807)

ALL of these social whatevers start out by offering a free service. Once you are popular, you start adding ads, mine and sell user data, or sell the whole thing lock stock & barrel to a whale like FB.

Re:How's that tech bubble working out for you? (1)

gmack (197796) | about a year ago | (#45421783)

I remember this exact logic right before we had the huge dot-com crash in the early 2000s. If it's not making revenue now it is dangerous to assume just throwing ads on it will somehow make it turn a profit rather than turn users off the product.

Re:How's that tech bubble working out for you? (0)

Anonymous Coward | about a year ago | (#45421535)

Sadly in this case the very people who built this trivial application also don't have any clue as to its value.

The code is worth about $100K. The people using it maybe more, but then how long is that going to last?

Spurning $3bn for that is probably the stupidest decision in the history of computing. How much did it cost to build? Were they really expecting more than 10,000x profit?

Ephemeral is a good word for this (2, Insightful)

roman_mir (125474) | about a year ago | (#45420357)

Snapchat specializes in ephemeral mobile messages, including text or photographs, that disappear after a few seconds. The service has not generated any revenue, but is especially popular among teenagers and young adults, who use the app to send messages to friends.

- I like the use of word 'ephemeral' to describe all three, the services that this company offers, the supposed customer base for it and the actual value of the company.

I see that it was just offered 3,000,000,000 USD and declined it, which while might be height of arrogance, does not surprise me. I would not be surprised to find out that tomorrow this very company gets picked up for 5,000,000,000 USD. I also would not be surprised to find out 2 years from now that it still is not generating any revenues and 3 years from now that its valuation is down to a few million ephemeral dollars (which by that time could be ephemeral all on their own).

Pretty much can't be surprised about anything in this age of rampant inflation and destruction of actual productive economy by the largest government and government manipulation of money in history.

Re:Ephemeral is a good word for this (2)

Zontar The Mindless (9002) | about a year ago | (#45420561)

I can't help recalling that a measly *1* billion would buy you the world's most popular open source database just 7 or so years ago...

So this must be the commercial advertisement (0)

Bob_Who (926234) | about a year ago | (#45420367)

Snapchat my ass, your billions mean nothing to me Zuckerberg. Nobody likes you, even if you could buy them with your windfall.

Re:So this must be the commercial advertisement (0)

Anonymous Coward | about a year ago | (#45420371)

Snapchat my ass, your billions mean nothing to me Zuckerberg. Nobody likes you, even if you could buy them with your windfall.

Envious, much?

Re:So this must be the commercial advertisement (4, Interesting)

Joining Yet Again (2992179) | about a year ago | (#45421213)

You know how when someone commits murder for money and gets away with it you don't just say, "You just envy the murderer because you wouldn't have been able to pull it off"?

Well, same moral scenario here.

Some people - and I know it's hard for some others to believe - genuinely won't do something they believe to be morally reprehensible, no matter how much they might materially profit from it.

For example, I was introduced to bitcoins about three years ago, and it was suggested to me that I start generating some. I replied by saying that I saw no reason why I should be entitled to money just from getting in at the start of a Ponzi scheme. I did generate one or two out of curiosity anyway, but deleted them. I guess I have lost out on hundreds of thousands of dollars there, but do I envy bitcoin multimillionaires? Of course not. They're operating by their rules, and I'm operating by mine. My value system is (obviously) more important to me than theirs.

Am I saying I could have achieved what every billionaire has achieved, were it not for my self-righteousness? Of course not. I don't have the engineering talent of Hewlett and Packard, or Linus Torvalds. Do I envy these guys? Again, no. H&P were naturally brilliant, and Torvalds was excellent but also in exactly the right place at the right time. There's nothing I could have done to be them. The world's not fair and I accept that. These people just... are. They were/are in leadership positions, and it makes sense why.

It takes a lot of balls to turn down 3 Billion (1, Funny)

Anonymous Coward | about a year ago | (#45420373)

They must really hate Zuckerberg.

Even if that's true ... (1)

Taco Cowboy (5327) | about a year ago | (#45420853)

They must really hate Zuckerberg.

... it really takes plenty of GUTS to turn down $3 Billion !

ads (3, Insightful)

Anonymous Coward | about a year ago | (#45420375)

the minute they monetize Snapchat with ads kids will stop using it

fuck, give it to me! (2)

magic maverick (2615475) | about a year ago | (#45420381)

I know that if I was offered 3 billion dollars for some fade chat program, I'd take it! Even if it was from arch-evil FaceBook. Of course, maybe they think they can get more. And more to the point, that 3 bil is not going just to one person, it's being spread out over the shareholders and vulture capitalists, as well as the founders (if they are still around). But still!

Re:fuck, give it to me! (3, Insightful)

jrumney (197329) | about a year ago | (#45420407)

Vulture capitalists would never turn down 3 billion dollars. They may be vultures, but they know very well when to cash out.

Re:fuck, give it to me! (4, Interesting)

girlintraining (1395911) | about a year ago | (#45420467)

Vulture capitalists would never turn down 3 billion dollars. They may be vultures, but they know very well when to cash out.

You never accept the first offer. There's negotiation. It doesn't matter what the offer is for, or the conditions, etc. When you're selling, you don't take the first offer. Ever. Because once an offer's made, that's a signal that it's feeding time. Sharks do not hunt alone.

Re:fuck, give it to me! (1)

FlyHelicopters (1540845) | about a year ago | (#45420539)

Maybe, or maybe you take the first offer because it is insanely high.

Pigs get fed, hogs get slaughtered. $3 Billion Dollars is a lot of money, is holding out for $4 Billion worth the risk of getting nothing?

Re:fuck, give it to me! (2, Insightful)

EdIII (1114411) | about a year ago | (#45420569)

I dunno. There are limits to that kind of approach.

We are talking about $3 billion. With a fucking capital B. How much is Snapchat at now in total investment with the shareholders? If all parties are in for maybe $20 million, that $3 billion starts to look like one hell of a successful exit plan.

I would take the first offer in a split second if it was at a couple hundred times the initial investment. Take it, move on, innovate someplace else.

Unless you had some sort of ideological reason not to. Only thing I can think about is if I created a successful zero-knowledge service with very little competition I would keep it alive for those reasons. Snapchat does not qualify for that. It's a fad and they should know it.

Re: fuck, give it to me! (1)

dnaumov (453672) | about a year ago | (#45420623)

3 billion was the second offer, the first was 1.

Re:fuck, give it to me! (3, Insightful)

aendeuryu (844048) | about a year ago | (#45420719)

This sounds a lot like the advice Groupon got.

Re:fuck, give it to me! (1)

Anonymous Coward | about a year ago | (#45420605)

They could be using the same strategy as my previous employer:

1. Get a great offer.

2. Hold out for a little more.

3. When that offer is expired or rescinded, get a lower offer.

4. Hold out for a little more.

5. Goto step 3.

Re:fuck, give it to me! (1)

feral-troll (3419661) | about a year ago | (#45420611)

I know that if I was offered 3 billion dollars for some fade chat program, I'd take it! Even if it was from arch-evil FaceBook. Of course, maybe they think they can get more. And more to the point, that 3 bil is not going just to one person, it's being spread out over the shareholders and vulture capitalists, as well as the founders (if they are still around). But still!

He just wants a couple of extra billions for his offshore account before he buys a villa in some gated community patrolled by ex-special forces and lives the easy life and if he wants to take the risk one can't fault him for that. Of course, all of this is according to 'the people briefed on the matter' whoever they are ('the people', it sounds like a news summary on Fox News). At least this way his employees know they have until early next year to find new jobs before the company gets 'acquired' and most of their jobs, except for a few key personnel, will be axed during the merger by a bunch of expensive designer clothes wearing, Harvard Business School degree wielding 20 somethings.

They're ALL on crack. (5, Insightful)

jcr (53032) | about a year ago | (#45420383)

When someone offers you $3B for a company with no revenues and a product that could be duplicated in a week, take the money and RUN.

FB must be brain-dead to offer that much, and Snapchat is insane to turn it down.

-jcr

Re:They're ALL on crack. (4, Interesting)

aaronb1138 (2035478) | about a year ago | (#45420483)

Or Facebook knew they would decline the first offer out of hand, and is just baiting would-be competitors to blow giant piles of money on a boondoggle. Zuckerburg strikes me as that kind of brilliant and calculating. Even if they had taken the $3B offer, Facebook could easily have made the acquisition terms so onerous as to make it stillborn.

Re:They're ALL on crack. (2)

photonic (584757) | about a year ago | (#45421119)

With $3B at stake, that would be pretty risky poker play for Facebook. If Facebook knows it is a boondoggle, it is likely that SnapChat's owners know it too, so their best action would be to take the money and run.

Re:They're ALL on crack. (0)

Anonymous Coward | about a year ago | (#45420487)

It's interesting to see that even young CEOs of up-start companies are greedy assholes that believe the sun shines out of their ass.
This is a 2-bit company that you won't hear of in a few years time.

Fuck them!

Re:They're ALL on crack. (1)

Anonymous Coward | about a year ago | (#45420587)

Or they're leaking this themselves, so they can actually try and sell it for that much? :P

Re:They're ALL on crack. (1)

somersault (912633) | about a year ago | (#45421195)

Maybe the NSA offered Facebook even more to acquire all of these embarrassing videos and other personal information? :p Or maybe the info is worth that to Facebook themselves. I would have thought they had enough already though..

Re:They're ALL on crack. (0)

Anonymous Coward | about a year ago | (#45421377)

you THINK you could duplicate it in a week. I'm pretty sure by now the devs have found and patched thousands of unforseen issues.

Re:They're ALL on crack. (1)

utnapistim (931738) | about a year ago | (#45421455)

> When someone offers you $3B for a company with no revenues and a product that could be duplicated in a week, take the money and RUN.

You could duplicate the website in a week and nobody would care (just like I could make a social website "just like facebook" and nobody would care).

Facebook is not interested in snapchat, it's interested in _the marketshare of snapchat_. A good way to get that would be to get the strings behind snapchat and make sure they're the ones who pull on them. That's worth billions to them; a website/service you could duplicate in a week, is worth the salary of a team of programmers, for a week (and nothing more).

Re:They're ALL on crack. (1)

rhsanborn (773855) | about a year ago | (#45421663)

Particularly the marketshare among teens and young-20s who Facebook is losing.

Re:They're ALL on crack. (1)

haruchai (17472) | about a year ago | (#45421761)

I believe we all lost any perspective of the value of money back in the '80s and have never regained our senses.

FTFY (5, Insightful)

jrumney (197329) | about a year ago | (#45420391)

Snapchat, a rapidly growing messaging service, recently spurned an all-cash acquisition offer from Facebook for close to $3 billion or more, according to people with a vested interest in the company's valuation.

Re:FTFY (1)

gl4ss (559668) | about a year ago | (#45420415)

yeah unless there's an official, sec legit, pr piece about it.. then it is just pumping. pumping pumping pumping.

I'd suspect they would sell it for a billion dollars, were you to have the money in hand.

it's shit simple product..

Re:FTFY (5, Funny)

Shimbo (100005) | about a year ago | (#45420671)

Unfortunately, they made the written offer via Snapchat, so it disappeared after 10 seconds.

at long last.. (5, Funny)

Anonymous Coward | about a year ago | (#45420477)

.. an honest company that says "sorry, we're aren't worth so much"

Valuation is completely skewed.. (2, Insightful)

spiffmastercow (1001386) | about a year ago | (#45420479)

I really don't understand how the "new" tech companies command such a high price point for such worthless products. Somehow Twitter is worth more than Redhat, FB is worth more than MS, and Zynga is worth more than EA? I get that there is value in novelty, and that some of the older companies may not be innovating the way they used to, but how is it possible that something trivial like Snapchat is worth more than a couple mil?

Re:Valuation is completely skewed.. (1)

FlyHelicopters (1540845) | about a year ago | (#45420555)

Pump and dump... MS and EA are far more likely to be here in 10 years, Redhat and Zynga might or might not be, but investors can move their stock price more via fluff news, so they focus there.

MS and EA are just cash machines, not very exciting.

Re:Valuation is completely skewed.. (5, Insightful)

EdIII (1114411) | about a year ago | (#45420593)

Simple.

With rapidly declining advertising revenues in the traditional distribution channels due to a fundamental shift in the way people are consuming entertainment, there is a massive glut of advertising budgets and an absolute panic in the marketing douchebag asshole fucktard executives world.

Twitter provides massive amounts of data for marketers to masturbate over and determine just what is in our little pea brains at the moment and what we might buy. Value to marketing? HIGH.

Redhat makes operating systems. Value to marketing? LOW.

FB is the poster child for not just marketing data, but the destination for the attention deficit order generation to get their communication fix, consume entertainment, and progressively more and more, obtain news about what goes on in the world. Do I understand it? Not one fucking bit. Shoot me first. Is it valuable to marketing? Apparently extremely valuable. Every business out there is fumbling around with consultants and 3rd party vendors to get a FB presence up and running.

MS makes operating systems, office collaboration software, database systems, a beginning attempt at a phone system, and a complete failure in the entertainment market. Value to marketers? Moderate, and only in the form of crapware.

Zynga is valuable for the same reason as FB.

EA? I dunno about those assholes. Ever since most of those companies went full retard with DLC, DRM, and general stupidity I don't play video games from them anymore. I'm into the indie stuff out there. Surprising quality from most stuff Humble Bundle sells.

Re:Valuation is completely skewed.. (1)

ButchDeLoria (2772751) | about a year ago | (#45421031)

Personally, I've gotten into indie gaming (though am not kept to enjoying it) by it simply coming to my platforms of choice. Not having to boot out of Debian for a lot of games is wonderful.

Re:Valuation is completely skewed.. (3, Insightful)

PCM2 (4486) | about a year ago | (#45420601)

Somehow Twitter is worth more than Redhat, FB is worth more than MS, and Zynga is worth more than EA?

Errr... apparently Twitter IS worth more than Red Hat, but Zynga's market cap is less than half that of EA and Facebook's is less than half that of Microsoft.

Re:Valuation is completely skewed.. (1)

spiffmastercow (1001386) | about a year ago | (#45420695)

At one point Zynga was worth more than EA. i was guessing at MS vs FB though.

Re:Valuation is completely skewed.. (1)

thegarbz (1787294) | about a year ago | (#45421167)

Somehow Twitter is worth more than Redhat

How many users does Redhat have. How many users does Twitter have? In the case of Redhat, how many of those users actually spend money on the product? Which one of these companies has a communication medium embraced by most teenagers, media, TV shows, is deemed important enough to include most celebrities and politicians?

FB is worth more than MS

Which one is the company with growth potential, that somehow knows everything about almost everybody, and which company has shown a complete inability to innovate in any market over the last 5 years leaving an endless stream of pissed off users in its wake, and even managing to piss off OEM partners?

Zynga is worth more than EA?

Citation? Plus point of order, EA makes revenues 4x that of Zynga, but does so by producing AAA titles and sinking a shitload of money into game development and advertising. Zynga makes >$1bn yearly revenue by making ... err copying... cheap fast games with far smaller development costs and by preying on a userbase which will keep pouring money into the company because they are addicted to the stupid games like crack.

I understand the current valuation of these companies. But I also understand that they are volatile. I expect Redhat and EA will be here in another 10 years. I don't think the same of Zynga or Snapchat, but right now I know which has the better short term potential.

ripped from next month's headlines... (1)

Anonymous Coward | about a year ago | (#45420507)

real papers, or the onion.. only time will tell..

mark zukerberg, asshole that he is, will rage over this and get arrested by the fbi after paying a group of hackers to "kill snapchat and make it as worthless as myspace". an effort that will largely succeed in its original goal; however, a long, drawn-out legal battle will result in huge settlement costing zukerberg and facebook even more than that three-billion offer.

captcha: weeping
awww, poor marky.

The year 2000 called (5, Insightful)

future assassin (639396) | about a year ago | (#45420511)

they want their bubble back as your offer sucked.

WTF has happened to the world. how the fuck can a chat service be worth 3 billion. You could equip every being in Africa with a generator, gas and the tools to create a new life with that much money,

Re:The year 2000 called (1)

FlyHelicopters (1540845) | about a year ago | (#45420547)

You could equip every being in Africa with a generator, gas and the tools to create a new life with that much money,

Well no, you couldn't, but it would be a heck of a start. :)

The people in Africa largely need clean drinking water before they need anything else. And an education, and stable governments, and a bunch of other things. :)

Re:The year 2000 called (1)

ae1294 (1547521) | about a year ago | (#45420983)

hey now give the guy a break he has standard oil stock and new stocks in the generator sector and was trying to do his own pump on this pump story... I heard you like pumping so he put in moar pumping action...

Wise Decision (1)

webdesign24 (2440170) | about a year ago | (#45420531)

Snapchat valued is more than $3 billion as many users have smartphones. It was a wise decision by Spiegel. So why he will sell snapchat for ONLY $3 billion if he knew that the company value is more than that and getting valuable in the future.

Re:Wise Decision (1)

FlyHelicopters (1540845) | about a year ago | (#45420553)

Maybe, but how much is enough? For me, the number is far below $3 Billion. :)

There is making a profit, then there is greed, and sometimes greed blinds you and makes you do stupid things.

Re:Wise Decision (0)

ae1294 (1547521) | about a year ago | (#45420991)

Yes it was just like that time I turned down that 3-sum with those two actrative bi-girls because I know I'm worth at least 3 but probably 7 hot ones and two stright girls included for free....

Re:Wise Decision (1)

jareth-0205 (525594) | about a year ago | (#45421301)

Maybe, but how much is enough? For me, the number is far below $3 Billion. :)

There is making a profit, then there is greed, and sometimes greed blinds you and makes you do stupid things.

Yeah, but we're not talking about taking money from starving children, we're talking about how much one overvalued company wants to pay for another. If I was selling and I thought I could get more then there'd never be an 'enough'. The more you have the more awesome you might be able to do, the more new startups you could fund, the more you might put into worthy causes. Facebook have no better use for money than I do...

Re:Wise Decision (1)

gl4ss (559668) | about a year ago | (#45420957)

lets see. so the value of revenue is 100x worth more than in conventional business if the "users have smartphones", no wait make that infinitely since they have no revenue to speak of - at all.

how does that fucking make any sense anymore? everyone is walking around with a technically snapchat capable phone. fuck, all walmarts customers are smartphone users so why isn't walmart valuation 1000x what it is now?

he would sell it for 3 billion because the revenue vs. 3 billion valuation just doesn't hold up in any sensible way. how the fuck does he know it's worth more than 3 billion dollars? he doesn't, he knows that conventionally it's worth about as much as how much money you can get from spamming all the users 3 messages.

heck, usually it would be valued at value of it's assets(none in this case) + profit of 4-5 years.

Re: Wise Decision (0)

Anonymous Coward | about a year ago | (#45421061)

<Foghorn Leghorn>Boy, I say boy, what you're paying for is potential. Of course it could be the potential to lose your shirt, but don't do that. I've sen you without your shirt on and it ain't pretty, no sir. Not pretty at all.</Foghorn Leghorn>

Too high (1)

edibobb (113989) | about a year ago | (#45420533)

If they turned down $3 billion, they eventually will learn that it was a really stupid mistake.

Well! That was stupid! (0)

Anonymous Coward | about a year ago | (#45420551)

They could be replaced tomorrow by the next new fad thing. Their business model is a fucking joke...

Someone offers you 3 billion for an easily replaceable not unique app.. YOU FUCKING TAKE IT!

The greed made them stupid.

Patent? (0)

Anonymous Coward | about a year ago | (#45420633)

Do SnapChat own a patent for the whole "self destructing message" thing?

FB have been trying to make their service THE ONLY way to communicate with friends. Wouldn't suprise me that FB might think its worth that much just to incorporate another hook for kids to compete with bigger competitors like Twitter going forward.

In this scenario, the brand SnapChat would be turfed and their IP used.

Re:Patent? (0)

Anonymous Coward | about a year ago | (#45420673)

All Google turns up for "snapchat+patent" is them patenting something like "tap to get a photo, hold to shoot video" - dunno if it's worth $3e9.

IIRC, there's already a bunch of similar off-the-record messengers, so what they're (not yet) selling is their userbase.

stupid (1)

Hamsterdan (815291) | about a year ago | (#45420637)

The average guy will never earn that kind of money (with a legal job that is). Next year, he missed it and crashed and burned ?

Pointcast Redux (2)

hirschma (187820) | about a year ago | (#45420711)

Those who fail to learn from the mistakes of their predecessors are destined to repeat them.

http://en.wikipedia.org/wiki/PointCast_(dotcom) [wikipedia.org]

TL;DR version (0)

Anonymous Coward | about a year ago | (#45420767)

At its height in January 1997, News Corporation made an offer of $450 million to purchase the company. However, the offer was withdrawn in March ... James Murdoch said it was due to PointCast's inaction

[A failed IPO and half a dozen aborted purchase offers later]

Instead, they sold out for about $7 million in May 1999 to Launchpad Technologies, Inc., a San Diego company founded and backed by Idealab, and the PointCast network was shut down the next year.

Taking this numbers for reference, is Snapchat even worth ~$45M it'll probably end up selling for?

Reminds of the time when Yahoo turned down $47.5B (5, Insightful)

linuxguy (98493) | about a year ago | (#45420741)

Reminds of the time when Yahoo turned down $47.5B from Microsoft in 2008. They have regretted it since.

Re:Reminds of the time when Yahoo turned down $47. (1)

Anonymous Coward | about a year ago | (#45421369)

reminds me of chatroulette

Look to Facebook and how come they were willing .. (2)

tyrione (134248) | about a year ago | (#45420977)

. to flood SnapChat with $3 Billion to get them out of the market and under their growing conglomeration. Believe it or not, these guys might be onto something that will knee cap Facebook, and they know it.

Re:Look to Facebook and how come they were willing (0)

Anonymous Coward | about a year ago | (#45421439)

ephemeral dick pictures?

jaysus ... we're doomed.

Re:Look to Facebook and how come they were willing (1)

Anonymous Coward | about a year ago | (#45421623)

... Believe it or not, these guys might be onto something that will knee cap Facebook...

Snapchat is onto something. So was Instagram. Facebook's problem is that they are Facebook, you know, that place where a lot of OLD people hang out. Kids are moving on and FB wants to follow them. Maybe FB has the cash to buy out every new social media competitor but I doubt it. And Snapchat thinks they can get more than 3 billion. Funny old world, innit?

The saddest thing (1)

mvdwege (243851) | about a year ago | (#45420995)

What saddens me is not that they refused because they want to stay in control of their own company and product, but because they're holding out for a higher offer.

Apparently that's the only reason you'd need to run a company: get noticed for a buyout.

Re:The saddest thing (1)

stenvar (2789879) | about a year ago | (#45421427)

<sarcasm>Oh, the horror of it! Inventors and entrepreneurs getting rewarded for what they do best, namely come up with new stuff and start companies around that! It must be stopped! If they aren't prepared to spend the next few decades slowly going crazy with day-to-day operations of some boring large corporation, they shouldn't found companies at all!</sarcasm>

Re:The saddest thing (0)

Anonymous Coward | about a year ago | (#45421691)

What saddens me is ... they're holding out for a higher offer

For three billion plus they can probably spare the money to get you a grief counselor, if you ask nicely

And yes, there are still plenty of people playing the buyout game. Snapchat seem to have a winning ticket - they played and won handsomely

Maybe they feared due dilligence (1)

GauteL (29207) | about a year ago | (#45421015)

If it really is true that Facebook offered them this much money (this is by no means certain, it could just be an attempt to inflate valuation) and they actually turned it down, it could well be that they feared that a due dillegence may cause Facebook to turn away, something which would hurt their floatation if they decided to do an IPO.

If your company isn't worth nearly as much as you like to present to the outside world, you don't really want close scrutiny.

what was that random video chat thing? (0)

Anonymous Coward | about a year ago | (#45421247)

some years ago, there was a video chat thing that let you connect with random people and chat via video.
a large cash amount was offered and they turned it down.
then it got filled with guys showing their junk to everyone/anyone.
now nobody can even remember its name.

Why? (1)

MrIlios (2524820) | about a year ago | (#45421259)

Personally, I don't see the value of SnapChat other than the large and increasing young user base it has. According to Evan Spiegal (SnapChat), the software is on a quarter of all UK smartphones (http://www.bbc.co.uk/news/technology-24925932). From my understanding, the software's main purpose is to allow a user to send a photo or video to someone else which then gets deleted immediately after viewing leaving no trace. A nice idea, but it is a false sense of security - the 'no trace' feature can not be guaranteed due to software that can intercept these pictures or videos or even another device recording what is displayed on screen. I would guess that the NSA are already 'backing-up' these pictures for anti-terrorism analysis.

Ridiculous (1)

tstur (38065) | about a year ago | (#45421287)

Idiots. SnapChat for rejecting, and Facebook for offering.

value of Snapchat (1)

stenvar (2789879) | about a year ago | (#45421419)

If Snapchat has any value at all (given how poor their software seems to be), it's that they are not part of Facebook or Google.

Of course, what this is really about is that Facebook is afraid that people will start communicating using some other platform, so they are trying to buy up and kill any potential competitor.

GNSA would love this. (0)

Anonymous Coward | about a year ago | (#45421525)

If FB controls another chat service the NSA would love all of that info they would recieve from them. Personally I don't care because I don't really use the FB service, but I would like FB to continue to spend their money in huge lump sums like this help bleed them so death.

Re:GNSA would love this. (0)

Anonymous Coward | about a year ago | (#45421563)

Snapchat's based in US - Facebook doesn't need to acquire them for NSA to get their hands on it. For all we know, they're already sending a copy of every picture to NSA under a secret order.

Did you miss that part where _any_ US company could get an NSL, and not everyone has the guts to fight against it.

brb going to go build a chat api (0)

Anonymous Coward | about a year ago | (#45421581)

But wait, why make billions when you can make.... millions?? bwahahahahhaa~

That was fucking stupid (1)

BitZtream (692029) | about a year ago | (#45421721)

Seriously, an ALL cash offer ... and you turned it down? You're an idiot. You're product isn't special or even that unique. Self deleting images that don't actually self delete? Come on.

With 3 billion in cash, they could have started over and had 10 years to beat Facebook at its own game, which is trivial since the Facebooks first move would have been to end the deletion part or just shut them down completely on purchase.

I totally understand not wanting to sell out, but if your price for something like SnapChat is higher than 3bn, you're just an idiot who's principals are cutting off his nose to spite his face. You might have made a stand, but it was a stupid stand to make and could have been far more beneficial to its users had they made the stand another day and walked off with the cash today.

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