Google reportedly tried to buy Snapchat for $4 billion

November 15, 2013

snapchat android

Internet titans are seemingly going nuts over Snapchat, a two-year old startup whose core product is a self-destroying messaging service.

Earlier this week, the Wall Street Journal reported that Snapchat turned down a massive $3 billion acquisition offer from Facebook. At the time, market watchers commented that paying so much for a company with $0 revenue would be a massive mistake for Facebook. For comparison, Facebook acquired Instagram, the popular photo sharing service for close to $1 billion at the beginning of 2012, while Marissa Mayer’s Yahoo paid $1 billion for blogging site Tumblr in another high-profile transaction this year.

But Facebook isn’t alone in its interest for Snapchat. Om Malik, the respect founder of GigaOm, first tweeted that Google offered Snapchat $4 billion:

Then ValleyWag filled in some of the blanks, supposedly from a different source: Snapchat first received an investment offer from Chinese Internet giant TenCent, that valued it at between $3 billion to $4 billion. CEO and co-founder Evan Spiegel reportedly turned down the offer and went to Facebook, which had previously expressed interest in the startup.

The social media giant offered $3 billion ($3.5 billion according to ValleyWag), but that wasn’t enough for Spiegel, who then requested “strategic investment” from Google. The maker of Android supposedly offered $4 billion for Snapchat, but ultimately, Spiegel decided to wait, hoping that he would get even more if Snapchat increases its user base over the winter.

Keep in mind that this rumor hasn’t been confirmed from reliable sources and that all the talk about sky-high valuations is hugely beneficial for Snapchat, at a time when the company is looking for investors.

Is Snapchat worth it?

So, why would Google or Facebook shell out so much money for a service that doesn’t have any revenue, never mind profits?

Facebook’s biggest problems are slowing growth, decreasing interest among young users, and the transition to mobile. Acquiring Snapchat, which is growing explosively, is hot among teenagers, and is mobile-only, seems like a good way to energize the aging social network.

Google doesn’t even have Facebook’s position in social media, despite huge efforts to turn Google Plus into a viable alternative. According to ValleyWag, Larry Page’s company admits that “Facebook has proved against Google that it’s better at social and consumer products.” So for Google, Snapchat could be the shortcut it needs to get ahead of Facebook in the all-important social race.

The problem with all this crazy billions talk is Snapchat is just one of many hot messaging apps. If users, fickle as they are, decide that a competing service is hotter, the explosive growth could turn into a fizzle overnight.

Is Snapchat really worth a third of Motorola? What do you think?

Comments

  • Shark Bait

    No way is snap chat worth half what Motorola is ! Crazy talk i tell you.

    Still that CEO has balls turning down $4,000,000,000!!!

    • Luka Mlinar

      The story is most likely fake. Company’s usually put fake story’s like these ones out so their value would go up. It’s a punishable offense but it’s hard to prove and almost never prosecuted. +they use word like “rumor” that makes it sort of ok.

    • APai

      I think if the ceo touches any of that money, snapchat would instantly lose its customers! those kids went to snapchat because they weren’t facebook or google in the first place!

      it’s sad that we are seeing small companies gobbled up by these big 4, who don’t have the balls to compete, but just want to buy off competition

    • Alison

      It’s probably just me… but what is Snapchat?

      • aqkhan

        I’ve never heard of it either. Probably similar to instagram.

    • On a Clear Day

      He wouldn’t be the first person who thought he was smarter than smart and ended up in the end with a “hot commodity” that suddenly was worth next to nothing. There is another name for “having balls” in a case like this – foolish.

      • Shark Bait

        Indeed , knowing when to sell is a tricky thing. If 4bill is real I think they would have taken that.

        My favorite example is draw something, which sold to zenyga for 200Mil after which every one stopped playing. Great timing guys !

  • beboo

    of course No

  • Groud Frank

    My friend asked me to join Snapchat. I find it an absolute waste of time and cannot understand why people would actively use it. Snapchat will have a MySpace-like lifespan. I am sure that 4B could be better spend somewhere useful. Put that towards buying BlackBerry and get your hands on come patents, QNX kernel and talented Java coders.

    • NeedName

      Could NOT agree more with you!!! 4B on another stupid idea that will go nowhere once google acquires it, and isn’t worth that in the first place . . . the big G needs to stop buying every company that comes along and get focused and spend their money a little more wisely and productively.

      QNX becoming the base of all google’s operating systems??? Real time mission critical OS that flies. . . I could live with that!

  • Data

    Snapchat is not worth $4 billion. It’s one of those things that will disappear by next year.

  • Bone

    It’s probably just me… but what is Snapchat?

    • Bazar6

      It’s a messaging service, but with self-detonating messages. You send a text/pic/vid to someone with the app installed, and set a timer on how long you want them to have it. They see the message, then it gets erased after the allotted time the sender set.

      It’s such a simple idea, I assume the only reason companies are offering a buyout is because of the user base.

  • googlre10

    Your last question really makes worth it. Certainly No way,It’s worth of what big Motorola was . of course 1/3.

    • jeff

      Is it just the flavor of the month?

  • Rajkumar

    4 billion for a simple messaging service and just 9 billion for NOKIA along with its hardware and R&D and other stuff …. MS U R REALLY TRICKY

  • julian k

    Sexting is worth 4 billion!!!! Damn

    • NeedName

      maybe goog just wants to scrape those dirty pics for inhouse use ;0

  • conspiracy

    I feel like this is hurting their value more than helping.

  • GavinAyling

    I think it’s odd that Google+ wasn’t set up with some open HTML standards for sharing data making an open alternative to Facebook that could grow like Android…

  • truepopo

    ya….i just take my trusty S-pen and screen shot the message and BLAM…no so destructable now is it?

    what a stupid program that wont be heard of in 3 years…this CEO better be careful before nobody wants it

  • George Av

    Oh god, if they did they’d ,make you have a google+ account -_-

  • Timmy

    Seems odd that Apple hasn’t copied, er invented similar features for iOS. If anyone needs to increase its user base is MS. Why isn’t Mr Gates opening his wallet for another toy app for WP?