A story that caught my eye on the Globe and Mail website was the one about Yahoo! considering investing $10 billion in Snapchat. Basically for those of you who don’t know (although really you should know, unless you’ve been living under a rock for the last 2 years), Snapchat is a “Los-Angeles based startup that makes a mobile application for sending disappearing photo messages”. (Saitto)
So is Snapchat really a good investment for Yahoo? I decided to do a little bit of research on the company in order to come up with some sort of a conclusion.
First of all, companies today in the mobile consumer space are doing very well. (Laporte) Start-up tech companies are drawing investors like never before.
Second, Snapchat itself is drawing talented top executives from both Facebook and Google. Taking over Snapchat’s PR and policy in mid-October is Jill Hazelbaker, former senior director of communications and government relations at Google. (Laporte)
As well, while currently Snapchat has little or no revenue, it is experiencing fast growth. (Saitto, Womack) It competes with Facebook, which tried to buy Snapchat for $3 billion last year.
So in short, it appears that Snapchat is in fact a good investment for Yahoo.
“Snapchat could become an important strategic partner for Yahoo, as it seeks new ways to distribute its content, apps and ads in the mobile world.” (Macmillan, Rusli)
Works Cited:
Laporte, Nicole. “The Snapchat Effect: How Los Angeles Startups Are Snatching Silicon Valley’s Tech Talent.” Fast Company. Fast Company & Inc., 2 Oct. 2014. Web. 05 Oct. 2014.
Rusli, Evelyn M., and Douglas MacMillan. “Yahoo Nears Investment in Snapchat.” The Wall Street Journal. Dow Jones & Company, 3 Oct. 2014. Web. 03 Oct. 2014.
Saitto, Serena. “Yahoo Said Close to Investing in Snapchat at $10-billion Value.” The Globe and Mail. The Globe and Mail Inc., 3 Oct. 2014. Web. 05 Oct. 2014.
Saitto, Serena, and Brian Womack. “Yahoo Close to Investing in Snapchat at $10 Billion Value.” Bloomberg.com. Bloomberg, 3 Oct. 2014. Web. 05 Oct. 2014.