With the gossipy 3 Billion acquisition talk going around, I'm curious to learn what the HN readers believe to be a proper or more logical valuation for SnapChat (which does not have any immediate or pending revenue sources)
$0<p>I hadn't heard of SnapChat until this acquisition story broke. I guess I'm out of touch or something?<p>Anyway, no revenue and no real hope of revenue = $0. VC can blow smoke up your ass until they collapse, blue in the face, but it's not a winning proposition.
$3bb<p>Supply-demand. If there's a suitor willing to drop $3bb on Snapchat, then that's the market clearing price is it not?<p>Given that Snapchat didn't accept, perhaps it's worth a tiny bit more.
As much as someone's willing to pay.<p>Personally, it does not surprise that FB is willing to pay 3B. FB is struggling with the younger crowd as of late, it's a great strategic move in my opinion.
@BoredElonMusk tweeted "I offered Snapchat zero dollars and am pretty sure I would have overpaid.", source:
<a href="https://twitter.com/BoredElonMusk/status/400701171272130560" rel="nofollow">https://twitter.com/BoredElonMusk/status/400701171272130560</a>
The problem I see with Snapchat is that:<p>a) currently no revenue, I imagine it is harder to monetize Snapchat than Facebook et al. But it is not my area of expertise so I can give them the benefit of the doubt that they can monetize it.<p>b) They are one lawsuit away from blowing up. I can see a future where they get hit with a child porn lawsuit or something similar. I assume they have good lawyers but it is still a rather significant risk.<p>I think it was a mistake not to take one of those billion dollar deals but I have been wrong before. If they can monetize their service and avoid lawsuits it could become huge.
I think social media services can grow extremely large, but monetizing turns people off. Facebook is tricky, because the data you post there is available forever, I fully expect to use facebook 30 years from now to look at my kid's pictures (that I take and post now). This is very different from a blurt on twitter or a video designed to disappear in seconds.<p>I can't imagine these services being worth as much as facebook, and I don't know what they're thinking turning that amount down. They have no revenue.
It's really just another Instagram purchase. Posting photos is one of FB's core features, so FB is putting out any fires before they can grow. It's like Yahoo buying out Google before it can ... oh wait.