In the recent class focusing on entrepreneurship, it was brought up that Facebook made a 3 million dollar acquisition bid for Snapchat, which was turned down. Since then I’ve been thinking about the social app, when I found myself confused as to why Facebook would want to buy out a company that makes no money. I did some research and found a few blogs that weigh in on the issue. It seems that Snapchat is valued so high because of the high volume it serves. In a Washington Post blog post, it is said that Snapchat serves around 350 million “snaps” per day. Another aspect in which Snapchat as impressed many is it’s growth rate. As stated in a New York Times blog, the amount of “snaps” has almost doubled in a few short months, going from around 200 million in June of 2013 to 350 million in September.

So it’s really Snapchat’s captured audience that business see as a potential opportunity to earn revenues. If Snapchat can sustain a level of growth, companies see it as an advertising platform. Personally, I think that advertisements on Snapchat would jeopardize the success of the app. I think advertisements on Facebook and Twitter work because of the complexity of the service. There’s frequently a high level of stimulation (text, pictures, etc.) on every page, so advertisements would blend in seamlessly, even go unnoticed. For an app like Snapchat, where the service it offers is so minimal and simplistic, I think advertisements would create distractions and would upset the user. For 3 billion dollars, I think Facebook would have to have some tricks up their sleeve on how to monetize the app.