Snapchat Rejects $3 Billion Bid From Facebook
Posted: November 14, 2013 by Emily Brown
Facebook was ready to drop $3 billion in cash to acquire a photo messaging service called Snapchat, a Wall Street Journal report reveals. While the ruling social media network with income of $5.1 billion in 2012 made the bid amid clear signs of losing teens as audience, it's surprising that an exceptionally young company with no revenue as Snapchat turned down the proposal.
To date, it's the biggest offer Facebook has ever made and if Snapchat had accepted the deal, it would have been its biggest purchase, as well.
Founded by 23-year-old Evan Spiegel back in 2011, the smartphone app allows consumers to send each other photos and videos that automatically disappear a few seconds after being seen. This Los Angeles-based firm could not be reached for comment. Facebook, on the other side, declined to say anything on the matter, or as its spokeswoman Denise Horn stated: "We don't comment on rumors and speculation."
What we see as a reason for the unexpected rejection is the hasty growth of the app, which will probably continue and leave room for even higher valuation. Expressed in figures, the number of users on monthly basis went from 200 in June to 350 million in September. Plus, we can't ignore the fact that it's wooed by other investors looking to buy a stake in the app who think it's worth $4 billion.