Snapchat must be huge in the teen/young adult demographic to justify this valuation as I don't see many adults using this app anymore. Although this is a fairly localized/anecdotal opinion of the app, perhaps in other regions, Snapchat is big among many demographic categories.
Reading things like this kinda depresses me. I guess I just don't understand what makes things popular on the web. I mean, I would have never thought things like Twitter, Instagram, all of the various messaging apps would ever get this much traction. I think it's bizarre.
And snapchat plans to make money how?<p>Plus, at least in europe kik and viber seem a lot more popular than snapchat. And it would take them about an afternoon to add a "self destruct" checkbox to their image and video dialogs...<p>I can understand yahoo desperately wanting to get a foot down "with the cool kids". But 10 billion, seriously?
>Users send more than 700 million disappearing “snaps” a day and more than 500 million stories viewed daily<p>well, in Internet dollars - $100/user of FB and the likes - 70M users is $7B scale. 500M exposures point to the same ballpark - the ballpark where it doesn't really matter whether it is $5B or $10B valuation. Even 10 fold growth would bring Yahoo only $200M - peanuts, and obviously Yahoo makes that investment not for money, it is just a cover fee for entry into the club.
It's not clear how much Yahoo is investing at that valuation, but I hope that the stated reason of re-creating an Alibaba type investment is not the primary driver. Despite the success of Alibaba, a single data point is not a trend (even a spectacular one like Alibaba), and I'm not sure that Yahoo's core competency is/should be picking winners.
How do you monetize a large user base without credit cards? How would they get teens to get their parents to pay for the ability to send nude pics to their friends?<p>Meanwhile, millions of small businesses paying $10 a month for secure document shredding with years of increasing profit remains large ignored by the media, nobody bats an eye. Nobody puts an insane valuation on it because it's not cool. So business is no longer about positive net cash flows but spending it. Whoever spends money in the coolest way is the winner as long as you got investors who suddenly forgot what happened the last time we were in the new and hip economy.