It’s hard to imagine turning down $3 billion. Really hard. But that’s reportedly what the mobile message service Snapchat has done. According to the Wall Street Journal, the company turned down a $3 billion offer from Facebook.
To start to understand – you’ve got to know what Snapchat is and what it isn’t. Basically, it lets you share a message or picture with your friends (or boyfriends) that’ll disappear after a few seconds.
Twenty-three-year-old Snapchat user Evin McMullen says there are some misconceptions about it. “I think it’s kind of funny that everyone assumes Snapchat is just for sexting,” she says. Snapchat, she says, isn’t about racy photos; it’s for “effervescent” communication. It’s about sending a friend a picture of a dog in the meeting she was just in.
“I liken Snapchat to passing notes in class,” she says, “and Facebook is like standing up in class and making a presentation.”
Sounds cool-ish. But what makes Snapchat’s founders willing to turn down $3 billion? The older of the two is 25! The company doesn’t make money!
“We’ve got some optimistic and bullish entrepreneurs who think they’ve got something worth more than $3 billion,” says Forrester Research analyst Julie Ask.
But is that optimism or youthful-over-optimism? “There’s so much that we don’t know,” says Brian Wieser, an analyst with Pivotal Research. Other possible offers. Wwhat the company’s investors want. “It’s hard to really pass judgment.”
Snapchat user Evin does have an immediate reaction. I asked: “If you were to Snapchat the owners of Snapchat a message about this decision, what would you send them?” “I would probably send Evan Spiegel, the CEO, a thumbs up,” she says, “and say, you know, you go get em.”
No word on what the founders’ moms think.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.