Snapchat, a social media service run by two 20 year-olds, recently turned down an offer worth billions of dollars in an article on The New York Times. This non-profitable business has yet to pass its third anniversary. So far, Snapchat’s leaders have turned down offers, including a recent multibillion-dollar proposal from Facebook, who is currently the leading social network. The reason behind this is because they think signing a contract now would leave many more billions on the table. Snapchat leaders think that it could potentially become one of the first social media companies in the United States to build its business largely around revenue beyond advertising. The company recently said that it processes 350 million messages a day. That is quite a big jump from February, when the company was only processing 60 million a day. A potential suitor for Snapchat is Tencent, one of the three Internet giants in China. This developing business could potentially take up an even higher offer. However, they shouldn’t wait any longer for better offers as I believe that Snapchat has already reached its peak in popularity and it will most likely start to decline from this point on. So while there are still billion dollar offers coming in, the Snapchat leaders should pick the right timing to accept one before it’s too late.
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