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Snap Inc. S-1

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Re: Snap Inc. S-1

#121

Post by ch0wn »

"The launch of Spectacles, which has not generated significant revenue for us, is a good example. There is no guarantee that investing in new lines of business, new products, and other initiatives will succeed. If we do not successfully develop new approaches to monetization, we may not be able to maintain or grow our revenue as anticipated or recover any associated development costs, and our business could be seriously harmed."

I don't think anyone expected Spectacles to be a cash cow, but I still would have expected a more positive outlook on them.

Re: Snap Inc. S-1

#122

Post by fullshark »

EnFinlay wrote: post #94
synaesthesisx wrote: post #25

Is anyone else seeing these numbers? How are they pushing for such a high valuation with those kind of losses? I suspect that Snap is merely capitalizing on traditional advertising metrics (engagement, CTR) which don't translate over on their app, and the advertisers just haven't caught on yet. People play with filters because they're funny/amusing, but those impressions don't convert into purchases in the same way o…

I would disagree about the value they are offering to advertisers. Offering a platform where targeted users actually engage with the ad is huge. I'm no advertiser, but that sounds kind of like the holy grail - the user is not only engaging with the ad, they are then sharing that ad + engagement with their friends.

Not only engaging with that ad, but you can literally observe them have fun / smile because of it.

Re: Snap Inc. S-1

#123

Post by brown9-2 »

stuckagain wrote: post #96
leothekim wrote: post #18

Earlier quoted context omitted.

Is it not possible to build your own "alternative in the market" for $2 billion?

Maybe it is, but this is a path-dependent phenomenon. GAE allowed Snap to reach this point in their growth. If they had earlier focused on internalizing their operations they might have failed to get here. Now that they are here, it apparently makes sense for them to commit to GAE for at least several more years.

Keep in mind that Google Cloud is much larger than App Engine.

Re: Snap Inc. S-1

#124

Post by throwaway2048 »

nlittlepoole wrote: post #21
leothekim wrote: post #18

Earlier quoted context omitted.

Is it not possible to build your own "alternative in the market" for $2 billion?

There is also the opportunity cost of investing in hardware

i doubt it would involve hundreds of millions let alone billions in hardware costs.

Re: Snap Inc. S-1

#125

Post by brentm »

brentm wrote: post #55

Much greater losses than Twitter's S1. Snap's revenue is 27% higher but 548% greater net losses. Twitter s1: https://www.sec.gov/Archives/edgar/data/1418091/000119312513...

Also quite expensive in terms of trailing sales multiple.

> Twitter went public at valuation around 30x trailing year sales and 15x forward year sales. At $25 billion, Snap would be valued at a huge 62x trailing sales.

> Assuming they could reach $1 billion of revenue in 2017, the 25x multiple would still be steep relative to the two predecessors.

(via http://blogs.wsj.com/moneybeat/2017/02/02/snaps-ipo-filing-e...)

Re: Snap Inc. S-1

#126

Post by [deleted] »

leothekim wrote: post #18
stuckagain wrote: post #8

"We have committed to spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google, some of which do not have an alternative in the market." There's some numbers for you that Google wouldn't have provided (as far as I have seen).

Is it not possible to build your own "alternative in the market" for $2 billion?

[deleted]

Re: Snap Inc. S-1

#127

Post by throwaway2048 »

andrewstuart2 wrote: post #113
leothekim wrote: post #18

Earlier quoted context omitted.

Is it not possible to build your own "alternative in the market" for $2 billion?

In my opinion, it's highly unlikely that you could match Google's hardware for $2 billion ever, much less in 5 years. Keep in mind that Google's revenue in 2015 was $75 billion. Their hardware and software know-how is fundamental to their ability to make this kind of revenue, so you better believe they're investing more than a measly $400M per year (Snap's $2 billion over 5 years) back into their hardware. This Snap…

You seem to be assuming that all of googles revenue is going back into hardware/backend investments, and that somebody using Google cloud offerings is getting full access to everything they are investing in.

Neither have any basis in reality.

Re: Snap Inc. S-1

#128

Post by vmarsy »

talklittle wrote: post #110
richardwhiuk wrote: post #12

Earlier quoted context omitted.

I find the "do not have an alternative in the market" comment interesting - is there really anything which AWS does not have the GCE does?

Come on, HN. How can nobody be mentioning some of the much cooler stuff available on Google Cloud? https://cloud.google.com/products/machine-learning/ It's a mistake to just compare Google with AWS, thinking in terms of basic storage and computing. That's boring and obviously there are tons of alternatives, including Snap Inc. building it themselves, for the amount of money cited. When it comes to cutting edge AI and…

How is it different from Azure ML and Microsoft Cognitive services?

Re: Snap Inc. S-1

#129

Post by joeblau »

leothekim wrote: post #18
stuckagain wrote: post #8

"We have committed to spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google, some of which do not have an alternative in the market." There's some numbers for you that Google wouldn't have provided (as far as I have seen).

Is it not possible to build your own "alternative in the market" for $2 billion?

It might be possible, but Snap could be constrained by engineering resources. Google has some super smart engineers and while Snap might be able to build something cheaper, that might mean pivoting your entire primary business to essentially compete with Google.

Re: Snap Inc. S-1

#130

Post by stanfordkid »

andrewstuart2 wrote: post #113
leothekim wrote: post #18

Earlier quoted context omitted.

Is it not possible to build your own "alternative in the market" for $2 billion?

In my opinion, it's highly unlikely that you could match Google's hardware for $2 billion ever, much less in 5 years. Keep in mind that Google's revenue in 2015 was $75 billion. Their hardware and software know-how is fundamental to their ability to make this kind of revenue, so you better believe they're investing more than a measly $400M per year (Snap's $2 billion over 5 years) back into their hardware. This Snap…

You don't need to match their hardware. You need to match the subset of features and functionality their hardware provides to you. That is a much smaller footprint and smaller/specialized engineering problem.
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