Rejecting Billions, Snapchat Expects a Better Offer

For many aspiring entrepreneurs, the biggest dream is to launch a start-up and walk away with a ton of cash. However, for two former fraternity brothers at Stanford, that was not the case. Working out of a beachfront bungalow in California, the two brothers created a social media service called Snapchat which lets users send photo and video messages that disappear after a certain time. Quickly gaining a reputation as a way to send provocative photos, it has also become a fun and easy way to trade photos and is one of the most sought-after business in Silicon Valley. William Liaw’s blogpost questions the promotion of “sexting” but defends it in that people are “underestimating its simplicity and committing the straw-man fallacy.” As a company that generates zero revenue, the two aspiring entrepreneurs have recently turned down a $3 billion buyout by Facebook. Expecting much more in the future, the two brothers believe that they may be one of the first social media companies to generate revenue beyond advertising. Although much is still uncertain, I feel that Snapchat made the right decision to hold off on the buyout. Much of the market for generating revenue outside of advertising in the United States have still been relatively untouched and there could be tremendous growth for their company if they play their cards right.