Facebook (FB) Fails in Latest Bid to Snap-Up Snapchat
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Facebook (NASDAQ: FB) is taking serious the Snapchat threat and recently offered to acquire the company for $3 billion or more, the Wall Street Journal reported Wednesday citing people familiar with the matter. The offer for the vanishing-message service was rebuffed as 23-year old CEO and co-founder Evan Spiegel looks instead to focus on building the service.
The Facebook offer came as Snapchat is in talks with other investors and potential suitors, including an investment from China's Tencent Holdings that would value the company at around $4 billion.
The excitement around Snapchat came in the wake of Twitter's (NYSE: TWTR) successful IPO debut last week, which raised nearly $2 billion and placed a $30 billion valuation on the social media phenom.
The $3 billion price tag Facebook is placing on Snapchat now comes at a significant premium to the $1 billion it offered in the recent past. It is also three times higher than the amount Facebook paid for Instagram in 2012 - its largest takeover to date.
Not only is Facebook recognizing the surging value of Snapchat, but venture capital is also seeing values rise significantly. In June, Snapchat raised $60 million in a round that valued the company at $800 million.
The current $3-$4 billion valuation talk for Snapchat also puts it in-line with the $3.8 billion valuation for the other hot social play - Pinterest. Although the trajectory of Snapchat's valuation is currently much faster.
While Snapchat is currently all the rage, some are questioning the 'bubble-like' characteristics in the social media space. Also, some are quick to point out that once red-hot Groupon turned down a $6 billion offer from Google in 2011, only to see its value fall below that price (although it is now back over - barely).
The Facebook offer came as Snapchat is in talks with other investors and potential suitors, including an investment from China's Tencent Holdings that would value the company at around $4 billion.
The excitement around Snapchat came in the wake of Twitter's (NYSE: TWTR) successful IPO debut last week, which raised nearly $2 billion and placed a $30 billion valuation on the social media phenom.
The $3 billion price tag Facebook is placing on Snapchat now comes at a significant premium to the $1 billion it offered in the recent past. It is also three times higher than the amount Facebook paid for Instagram in 2012 - its largest takeover to date.
Not only is Facebook recognizing the surging value of Snapchat, but venture capital is also seeing values rise significantly. In June, Snapchat raised $60 million in a round that valued the company at $800 million.
The current $3-$4 billion valuation talk for Snapchat also puts it in-line with the $3.8 billion valuation for the other hot social play - Pinterest. Although the trajectory of Snapchat's valuation is currently much faster.
While Snapchat is currently all the rage, some are questioning the 'bubble-like' characteristics in the social media space. Also, some are quick to point out that once red-hot Groupon turned down a $6 billion offer from Google in 2011, only to see its value fall below that price (although it is now back over - barely).
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