As of November 13th, Facebook decided to purchase Snapchat, yet Snapchat has turned down the $3 billion offer.
Based on data collection, Instagram consists of 150 million users and Snapchat has approximately 30 million users. Both companies appear to be growing with Instagram growing 2.5% a month and Snapchat by 4% a month.. Following this rend, Snapchat will no doubt surpass Instagram in the near future. In addition, on average, Instagram users post 55 million images a day, while Snapchat users share 350 million pictures a day. That’s 6 times more images being shared!
When Instagram was acquired by Facebook, the sold price was at $1 billion. With Snapchat’s current status, I believe Facebook has definitely undervalued Instagram. Since the number images being shared on Snapchat is 6 times of Instagrams, Snapchat should at least be worth $6 billion. Evidently, Snapchat has made the correct decision in terms of turning down Facebook’s offer.
In the long run, Snapchat still has lots of potential to grow and succeed. If Snapchat can correctly build its business through targeting the right target market and provide more features for users such as able to edit the contrast and other effects of the taken photo, it can surely capture more new users!