From Yan Kai’s blog, I have to agree with him that a $3 billion proposal is no small sum of money, however I must point out that Snapchat in the end could be making a bad decision. Snapchat is currently one of the most popular applications to hit both Android’s and Apple’s app stores. It is currently becoming more and more popular as people argue that it is the new big thing. Snapchat has the potential to generate large revenues, however we cannot compare its success to Twitter’s.

Twitter has existed longer than Snapchat today; therefore we could not compare the time length in which the two businesses can become successful. Also another key important aspect that we should not forget about is that Snapchat does not generate revenue other than its capital investment, this in turn results in Snapchat not having much value at all.

Although one can argue that Snapchat could create more revenue streams such as selling the application or even advertisements. However this in turn could result in loss of customers and even lower Snapchat’s value. Maybe Snapchat made a mistake for not taking the $3 billion offer then?

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Yan Kai’s Blog post: https://blogs.ubc.ca/yankaing/2013/11/14/3-billion-offer-rejected/