Snapchat rejects Facebook $3 billion takeover bid, says report

Facebook joins GSMA trade group

Facebook is back at it, again. The social networking giant is reported to have offered popular messaging service, Snapchat, $3 billion in a failed takeover bid. The Wall Street Journal claims that Facebook tried to woo Snapchat with of $3 billion or more, but Snapchat co-founder Evan Spiegel turned it down. Spiegel rejected the offer because he preferred to wait until 2014 for perhaps a better valuation.

Of course, when contacted, Facebook gave the usual corporate response of “We don’t comment on rumors and speculation.”

Regardless of it being a rumor, so many things could be made of this. For starters, why would Facebook want to waste more than $3 billion on a messaging service when it already has its own? The acquisition of Instagram made sense because it offered an experience Facebook didn’t have; sharing photos with cool filters and quick messages work for so many people. In addition drawing revenue from Instagram is a much easier path than that of Snapchat.

However, this doesn’t dissolve Snapchat of foolishness either. What if things don’t go so well next year and the offer they turned down is gone for good? Ask Yahoo shareholders about that botching of the Microsoft takeover bid, or Groupon shareholders when it turned down Google’s money. I’m sure both companies would do things differently if they had the chance.

For these reasons, Snapchat needs to be careful.

What do you guys think. Do you think Snapchat should’ve taken the deal?

[Mashable; via WSJ]

  • Willie D

    Snapchat isn’t even worth 3 Billion.

    • Truffol

      You are right, but frankly, it isn’t that Snapchat is worth $3bn, but rather how much valuation Snapchat can take away from Facebook. Although these social platforms (Snapchat, the ex-Instagram) make no revenue, they take away valuable “social time” or “social traffic” hence reducing Facebook’s revenue. At a $118bn valuation, Facebook wipes $3bn off its valuation if its stock price drops a mere 2.5%. So Facebook is paying $3bn to buy an insurance to stop bleeding social traffic to these platforms.

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