HN's algorithm has a sense of humor: this pairs nicely with the other front-page story about the 2014 prediction that Facebook would be dead by 2017.
This could as easily have been titled why X will be the most profitable social media IPO ever. It reads more like someone is hoping for them to fail and is grasping for reason to justify this unpleasant emotion.<p>Snapchat established itself in a challenging marketplace dominated by large, successful and well funded companies. Something Google inspite of all its engineering prowess, financial resources and influence has failed repeatedly to do. They have not even come close.<p>Let's give the founder some credit for gaining a large and engaged userbase. Its a huge achievement in any context and given competitors are making money there is no reason think Snapchat can't.
IPOs don't really generate profit for companies. They allow one group of people to trade equity for cash and a second group of people to make the exact opposite trade. On net, society is left with exactly the same amount of equity and cash. If the IPO jumps, it means the sellers lose while the buyers win. If the IPO falls, it means the sellers win while the buyers lose. In either case, it's pretty much distributional and zero-sum. I don't understand why this headline is newsworthy. Profit is not the purpose of IPOs.<p>(To be clear: IPOs do have purpose. They generate cashflow. And they diversify/broaden the investor pool.)
Since Facebook's IPO, which tech unicorns still feel bullish?<p>Here are the tech IPOs I can think off the top of my head. Maybe it's selection bias (I only remember the ones that don't look healthy), but this is what I thought of, and they all are not doing well compared to their IPO price, or were on a heavy downward trend:<p>- Box <a href="http://finance.yahoo.com/quote/BOX?ltr=1" rel="nofollow">http://finance.yahoo.com/quote/BOX?ltr=1</a><p>- Pandora <a href="http://finance.yahoo.com/quote/P" rel="nofollow">http://finance.yahoo.com/quote/P</a><p>- Twitter <a href="http://finance.yahoo.com/quote/TWTR" rel="nofollow">http://finance.yahoo.com/quote/TWTR</a><p>- Tableau <a href="http://finance.yahoo.com/quote/DATA" rel="nofollow">http://finance.yahoo.com/quote/DATA</a><p>- Groupon <a href="http://finance.yahoo.com/quote/GRPN" rel="nofollow">http://finance.yahoo.com/quote/GRPN</a><p>- Twilio <a href="http://finance.yahoo.com/quote/TWLO" rel="nofollow">http://finance.yahoo.com/quote/TWLO</a> (too short of time to tell, but including it here anyway)<p>LinkedIn had fallen far from its high until Microsoft bought it: <a href="http://finance.yahoo.com/quote/LNKD" rel="nofollow">http://finance.yahoo.com/quote/LNKD</a><p>King (Candy Crush, etc.) was bought by Blizzard but even with the premium it sold at, it was still about 25% off its IPO: <a href="http://fortune.com/2015/11/03/activision-blizzard-king-digital/" rel="nofollow">http://fortune.com/2015/11/03/activision-blizzard-king-digit...</a><p>Of course there have been other unicorns, less sexy media (including non-American) darlings that might be doing just fine. And of course Facebook still looks strong, but FB always seemed like it would do string, at least out of all the other social networks. I admit that I'm not much of a Snapchat user, even though many of my friends have migrated over. But does it really have the same potential as FB to integrate itself into all areas of digital life? Even if SNAP has strong underlying numbers, it'd be an outlier if it remained strong 3-5 years from now.<p>On a sidenote, would love to see an update to this NYT interactive at the time of Facebook's IPO: <a href="http://www.nytimes.com/interactive/2012/05/17/business/dealbook/how-the-facebook-offering-compares.html" rel="nofollow">http://www.nytimes.com/interactive/2012/05/17/business/dealb...</a><p>edit: added KING (Candy Crush makers)
The $1.05B revenue for 2017 figure is completely made up.<p>But even if you assume it's real, the $25B valuation still makes zero sense. 25 times the annual revenue, not the profit.
When social media get started loading fun part, then, they should think how to convert into a tool people can use within their daily social activities – increase user coupling grade.
When you use Snapchat you will notice that most of the top "news" publishers are the sort of Daily Mail and other tabloids infested with celebrities and kardashians bogus stories. It does not allow you to curate newsfeed per your taste. The publishers I want to read/watch/follow are not on Snapchat or I can't pick and create my selection. Unlike Facebook, where my wall is full with informational posts catered towards me, by me. This can tell you a lot about who is paying for advertisements on Snapchat and what type of audience they are catering to with what kind of content. It reeks desperation.<p>Edit 1: Grammar