I was browsing BusinessWeek when I found this video about Snapchat, a smartphone application that has gained significant popularity over the past year. According to the video, the owners of Snapchat turned down Facebook’s offer of $3 billion to buy the photo-sharing app. Their rejection of Facebook’s buyout offer made me wonder how Snapchat even made money. After finding this article on ABC News, I learned that Snapchat actually has no revenue streams at the moment. The company is running solely off of money raised from investors, which will eventually deplete. Although Snapchat has been able to amass a significant following, they need to find a way to generate revenue.

I feel that selling advertisements is not an effective way of making money through the app. People who use Snapchat often want to quickly capture a candid moment, so showing an advertisement for even a brief moment would have a significant effect on the user’s experience. I believe that the most viable way for Snapchat to make money would be to sell the company. Although I support their decision to decline Facebook’s offer of $3 billion, the owners of Snapchat should sell soon, because the app’s popularity will eventually fade.