(Source: https://blogs.ubc.ca/chitleungleung/)
There are not too many companies who have both the ability and willingness to refuse 3 billion dollars offered by Facebook. However, interestingly, Snapchat was reported to have done that.
Chit Leung (Kenny) Leung believed that it was a bad decision to refuse the offer. Actually, I am not totally agree with him.
Before judging the decision whether it is good or not, we should know what are Facebook and Snapchat. Facebook is the giant in the social media which owned another application: very similar to Snapchat. Snapchat is a just photo messaging application.
Why does Facebook want buy this company when they have already got a similar one? It was because of the data: Instagram users post almost 55 million pictures a day. Snapchat said its users are sharing 350 million pictures a day which is almost exactly the same as Facebook. In brief, Snapchat has the potential ability to beat Facebook in the field of photos. At the same time, if Facebook bought Snapchat, Facebook can control all the market and eliminate an enemy easily.
Is it a good idea to refuse the offer from Facebook? It is not necessarily bad. According to the data published by Analytics company Onavo: the owners of Instagram is increasing by 2.5% a month, and that of Snapchat is increasing by 4% a month. Snapchat may have the chance to beat Facebook at last in the field of photo. But it takes risks.
Business is a gambling game. I think if we want to make profits, we have to take risks. If the directors of Snapchat think it is a good idea to take risks, just take it.
At first I thought it was a bit cheeky for Snapchat to turn down the 3B$ offer. But after considering the points you’ve brought up I can see the logic behind it. And after all, It is better to have multiple firms competing for competition than one enormous firm that has a monopoly (like Facebook is becoming.)