In the age of the impermanent 'selfie' Snapchat spurns Facebook's shilling.
Nov 18, 2013
Last week Snapchat, the Venice Beach, California-based photo-sharing mobile social media app company, reportedly turned down a takeover offer of US$3 billion in cash by Facebook. Snapchat doesn't make any money so why would Facebook want to spend three billion bucks on it - and why would Snapchat tell that nice young Mr. Zuckerberg where to stuff his greenbacks?
Snapchat is free to users and allows them to take photos and make videos and then annotate them before sending the images on to friends. The images are automatically deleted within one to ten seconds after being opened. In the age of the emphemeral selfie Snapchat is king - until it too fades just like the content it carries.
Snapchat is in competition with several other, similar social network image services (including Instagram which Facebook bought for a billion bucks last year) and the company doesn't seem to be in the least bit bothered about raking in revenues - for the time being at any rate. It is also well aware that its its current popularity could easily fade as the next novelty clambers over its head and on to the top of the greasy pole.
Given that, why would Snapchat's owners, workers and private equity investors spurn Facbook's offer? Could it be that Snapchat's management are just 'too cool for school' egotists that are are doing a bit of posturing and pointing-up that an increasing number of trendy types now regard Facebook as old-fashioned, staid and past it?
Or is it just basic greed? After all, if Facebook will offer $3 billion, why wouldn't Google offer $6 billion? Some company somewhere will want to gets hands on Snapchat user data - and those users belong to a demographic that are turning away from Facebook in increasing droves.
Snapchat users send 350 million photos and videos a day and only a month ago the company was valued at $800 million - now it is apparently worth nearly four times that. Why, that's more than the rate of house price infaltion in London!
So, three billion could be a small price to pay to gain access to a cash-rich segment and then later milk the hell out of it via the usual routine of bombarding users with endless adverts whilst selling data on to 'partners' for strategic marketing purposes.
A recent study by the Pew Internet and American Life Project found most Facebook users now drift away from the service for weeks at a time before most return but thereafter use the site less and less frequently.
It is yet another example of the law of diminishing returns and Facebook users put the churn down to "the tedium and irrelevancy" of Facebook content. The Pew study shows that 38 per cent of 18-year old to 29 year-olds (the bedrock of Snapchat's demographic and the ones who made Facebook the power it still is, but for how long?) will either spend less time on the site or abandon it altogether in 2014.
That's because Facebook is now perceived by many youngsters as corporate, sluggish, overly self-involved and too rich. It has lost or is losing what made it unique and attractive and it's not coming up with many whizz-bang ideas from within to help change the situation. So what it can't do itself it is trying to buy-in.
The trouble is that, as history shows us, far too many expensively acquired services and sites get absorbed, digested and then unceremoniously expelled from the body corporate without providing it with any meaningful nutrition.
The time is coming when Facebook will no longer be the default destination for social media types. Snapchat may well see this to be self-evident - but will the alternative with another set of suits and bean counters make any real difference?