Robert's Blog

Snapchat has declined a 3 billion dollar offer from Facebook, even though the company has made $0 in total revenue. I believe that the company saw this offer as   proof that refuted their beliefs that Snapchat will continue its exponential growth. Snapchat took a major risk by trusting that their app truly has longvevity and is not a fad. If this is the case, the company’s decision is an intelligent financial decision. In 2012, Facebook created an imitation app called “Poke”, which flopped tremendously. Facebook is also beginning to lose their teen audience to apps like Whatsapp and Snapchat. This is because Facebook was designed as a desktop social network site, and was able to overtake Myspace due to privacy concerns. If the same logic is applied to Snapchat, it is clear why the company would hold onto their shares. Snapchat was developed for a mobile platform, which is growing exponentially, and is almost completely private. Regardless of Snapchat’s decision, Facebook’s long-term weaknesses have been exposed. Even if Facebook had obtained Snapchat, they simply do not have the resources to buy out every app and monopolize the social network.