Snapchat thinks it's worth more than $4B because it hasn't monetized yet
posted by Michael H. / Nov 14, 2013, 9:33 AM
Instagram was purchased by Facebook for $1 billion because of its user base, despite the fact that it consistently lost money. Snapchat doesn't want to follow that path, and it believes that it has the perfect model to allow for monetization. According to an investor (not Snapchat itself), the key is apparently the fact that users have to press and hold on the screen to view a Snapchat message. Because of this action, you can almost guarantee the user's eyes are on the screen, making that the perfect time to slip in an ad.
This is a much more powerful draw than in-stream ads that you'd find on Facebook or Twitter, where there is no guarantee that users will see the ad, let alone stop and look at it. CEO Spiegel has said he is open to the idea of serving ads, but that isn't the plan just yet, and there's no guarantee the app will serve ads in the fashion described above. We think an implementation like that would certainly be great for ad engagement, but it would also lead to more of a backlash from users because the ads would be so forced. Users like to have more of an option when it comes to ads, as we all know with the prevalence of ad-blockers.
Posts: 922; Member since: Oct 18, 2011
Idk.. I would have taken the money and retired.. or work on something new. Things like this are volatile. Who knows when a developer will release the next big thing and leave snapchat in the dust. The unfortunate thing is the success of an app like this means to cash in they will bring ads to it, which will more than likely ruin the experience - especially if FB gets ahold of it. 4Billion? I couldn't turn down that payday!
posted on Nov 14, 2013, 9:55 AM 13
Posts: 1654; Member since: Jul 10, 2013
a100%, the chumps will regret it down the road especially when they choose to monetize this overrated...thing
posted on Nov 14, 2013, 10:00 AM 8
Posts: 2155; Member since: Oct 29, 2012
It's absolutely crazy, you start some project, Instagram, Snapchat, Waze, whatever, and a few years later BILLIONS are flying around. I mean how many of us are on the geeky side of things? Imagine McLTE or androiphone20 above me coming up with something, and the road from PA forums leads to private jets and an artificial island at the Caribbeans or Dubai.
posted on Nov 14, 2013, 10:10 AM 1
Posts: 140; Member since: Aug 01, 2013
how is this thing worth more than instagram lol
posted on Nov 14, 2013, 10:22 AM 2
Posts: 113; Member since: Aug 16, 2012
I read an article this morning that explains why the company is probably worth $4B. They have a patented technology that requires a user to press and hold the screen in order to see content. If you don't press and hold, you don't watch a Snapchat picture or video. For mobile devices, this is the key to ensuring that users are actively consuming content. Including advertisers. This ability to confirm that users are exposed to advertising is worth a TON.
posted on Nov 14, 2013, 1:00 PM 1
Posts: 613; Member since: May 16, 2013
sometimes i begin to question the value of online advertising, i mean how do we measure the efficacy of online advertising? how do we quantify the value of advertising exposure? does anyone find it incredible how Google/Facebook managed bring in hundreds of billions of dollars from advertising alone? how has advertising changed from television to internet? how much value has mobile/online adverstising created over TV in the past decade?
posted on Nov 14, 2013, 1:58 PM 0
Posts: 381; Member since: Nov 07, 2013
sometimes its good to keep things for a little longer. i think they made the right decision they believe they can do better than this. just like youtube,Instagram are valued more now after they got sold. they believe that there app is worth more they might get the right price if they wait a little longer.
posted on Nov 14, 2013, 2:49 PM 0
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