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Snapchat Said in Funding Talks With Alibaba at $10B

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Re: Snapchat Said in Funding Talks With Alibaba at $10B

#21

Post by tomblomfield »

acoyfellow wrote: post #7
bsenftner wrote: post #3

I don't understand this valuation - it's makes no sense to me. Can anyone explain how SnapChat could be worth even a fraction of this? Where is the value in SnapChat's user base, future blackmail? It's not like someone using SnapChat is in the appropriate state of mind to follow any ads in the app. I don't get it...

It's a communication platform that the younger generations are using as their primary form of communication. That is big.. not saying it's $10B big, but SnapChat has the chance to become something larger than just stupid selfies.

They may have a chance of becoming a useful communication platform, but at $10bn, there's not a huge amount of upside left. I'm struggling to see how the very substantial risk of not becoming that platform could have been priced into the investment.

Re: Snapchat Said in Funding Talks With Alibaba at $10B

#22

Post by Iftheshoefits »

acoyfellow wrote: post #7
bsenftner wrote: post #3

I don't understand this valuation - it's makes no sense to me. Can anyone explain how SnapChat could be worth even a fraction of this? Where is the value in SnapChat's user base, future blackmail? It's not like someone using SnapChat is in the appropriate state of mind to follow any ads in the app. I don't get it...

It's a communication platform that the younger generations are using as their primary form of communication. That is big.. not saying it's $10B big, but SnapChat has the chance to become something larger than just stupid selfies.

What you wrote sounds to me like this: if SnapChat were something else, and not (just?) SnapChat, maybe in the same "space", it could be worth a lot.

Edit: I am deeply skeptical that a market filled primarily with people who have little or no income will support an ad-based revenue stream valued at $10bn. I would be even more skeptical if the revenue for SnapChat were supposed to come from a pricing structure.

Re: Snapchat Said in Funding Talks With Alibaba at $10B

#23

Post by [deleted] »

bsenftner wrote: post #3

I don't understand this valuation - it's makes no sense to me. Can anyone explain how SnapChat could be worth even a fraction of this? Where is the value in SnapChat's user base, future blackmail? It's not like someone using SnapChat is in the appropriate state of mind to follow any ads in the app. I don't get it...

[deleted]

Re: Snapchat Said in Funding Talks With Alibaba at $10B

#24

Post by AndrewKemendo »

JonLim wrote: post #5
Alupis wrote: post #2

My company has already created an 11main.com (Alibaba's first US ecommerce website) account and setup a significant amount of our catalog. The site is still in private invite only -- but hopefully will go public soon. We expect Alibaba to come into the US on a storm. They are huge - they have capitol, and they can afford losses in the hundreds of millions per quarter just to compete with Amazon (and snuff out part of…

What would differentiate 11main (or any other Alibaba property) from offerings in the US? Amazon probably has quite a few people locked in with Prime and their Kindle devices (I know I wouldn't switch e-book providers) so I wonder what exactly would 11main do better?

Amazon has slowly been raising prices, so Alibaba could come and undercut prices but where Amazon has it's best advantage I think is in it's lightning fast delivery. Something that takes more time and infrastructure to compete with.

Re: Snapchat Said in Funding Talks With Alibaba at $10B

#26

Post by nkozyra »

free2rhyme214 wrote: post #20
badloginagain wrote: post #17

Sorry if this is a dumb question, but how does Snapchat make money?

They don't currently but they will have to display ads eventually like Twitter, Facebook, Pinterest, Tumbler, and the like because a business can't run on VC fumes forever with stockholders.

"but how does ____ make money?"

"They don't currently but"

Given how many times I've seen this in the last few years it might be time for me to figure out how to cash out before the lights go off.

Re: Snapchat Said in Funding Talks With Alibaba at $10B

#28

Post by amino »

acoyfellow wrote: post #7
bsenftner wrote: post #3

I don't understand this valuation - it's makes no sense to me. Can anyone explain how SnapChat could be worth even a fraction of this? Where is the value in SnapChat's user base, future blackmail? It's not like someone using SnapChat is in the appropriate state of mind to follow any ads in the app. I don't get it...

It's a communication platform that the younger generations are using as their primary form of communication. That is big.. not saying it's $10B big, but SnapChat has the chance to become something larger than just stupid selfies.

and, quite importantly one that is not yet owned by facebook.

Re: Snapchat Said in Funding Talks With Alibaba at $10B

#29

Post by ulfw »

It seems, we are seeing the repetition of the first tech bubble when it comes to overblown valuations. Those valuations aren't really on realistic future earning potentials anymore. They rather are on future expected selling price. The idea being that 'I buy something for 10 times as much as it is worth, in hopes that I find someone who will pay me 20 times as much as it is worth' etc. Obviously that can't go on forever and the bubble burst might be as dangerous and devastating as the first one, unless valuations magically cool down.

Re: Snapchat Said in Funding Talks With Alibaba at $10B

#30

Post by nkozyra »

free2rhyme214 wrote: post #20
badloginagain wrote: post #17

Sorry if this is a dumb question, but how does Snapchat make money?

They don't currently but they will have to display ads eventually like Twitter, Facebook, Pinterest, Tumbler, and the like because a business can't run on VC fumes forever with stockholders.

And to iterate a bit on my last point ... there are spaces where advertising is inherently valuable, where you have a captive or semi-captive audience ... I don't see messaging (at least in the mobile space) as particularly banner-friendly.

Now obviously I wish I knew how to target the mobile messaging market; I don't. But it seems like you could see mass migrations based almost exclusively on presentation the way MySpace rapidly lost to Facebook.

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