Irrespective of present revenue, the acquisition value of Snapchat to Facebook, Google, Yahoo and co basically puts a floor on the valuation. E.g. if I am an investor and I think Google would pay $5B for Snapchat, it makes sense to buy it at $4B. So I guess the trick is not to figure out how much revenue Snapchat will generate on its own, but rather how additional revenue Google could generate if it owned Snapchat (which will drive the acquisition price).
Snapchat is Intrinsically Worthless
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Re: Snapchat is Intrinsically Worthless
#32I'll suggest a simpler framework for valuing Snapchat: probability of becoming another Facebook. If you think it has a 5% chance, then it should be valued at around 5 billion (relative to Facebook's 100 billion).
I think there is literally 0 chance for another Facebook. Google tried with Google+ - billions of dollars, millions of man hours by brilliant engineers, crazy bundling strategies by Google. Is Google+ another Facebook yet? Nope, not yet, maybe not ever.
Your strategy has merit, but simply making another Facebook is not going to work now (It would have back in Myspace days). Now there is not an untapped market of people - almost everyone has things vested in social media companies. 1. Companies need either to do better then Facebook (Once again Google tried. Do not get me wrong, there is a fair chance that eventually Google+ will prevail, but very few projects have full might of Google paving their success.) 2. Or have different punchline than Facebook does to attract users (This is what Snapchat did). *typoed
Re: Snapchat is Intrinsically Worthless
#33With WebRTC, can someone make a ephemeral peer-to-peer, one-to-one or one-to-many messenger? I think that would be more private. Sever the 3rd party.
I'm not sure most people would grasp the difference between a company that says it doesn't keep your data and a company that says it can't keep your data.
Re: Snapchat is Intrinsically Worthless
#34With WebRTC, can someone make a ephemeral peer-to-peer, one-to-one or one-to-many messenger? I think that would be more private. Sever the 3rd party.
You can't really make anything "ephemeral" with data. The closest you can get is probably a neutral third party that promises to delete the data at a future point, and locks down all endpoints where users can see the data. Of course this is still quite imperfect.
With a distributed version, you'd just have to trust all the people you're sending data to to delete it.
Re: Snapchat is Intrinsically Worthless
#35I'll suggest a simpler framework for valuing Snapchat: probability of becoming another Facebook. If you think it has a 5% chance, then it should be valued at around 5 billion (relative to Facebook's 100 billion).
Electronics/handset manufacturers have a 95% chance of becoming the next Apple and given that their execution/marketing/technology/etc is 5% behind/off doesn't value them at $450bn, i.e. the market doesn't expand with new players, and FBs network effect is too large to ignore.
Re: Snapchat is Intrinsically Worthless
#36Their present valuation is a glitch in the Matrix. Enough of them and you will realize the existence of said Matrix.
Re: Snapchat is Intrinsically Worthless
#37The comment about stickers makes me think you don't understand how much money they make and how much people use them. It's massive. Look at Line made 17 million from stickers in Q1 this year, Kakao made 311 million in revenue and I'm not sure the breakdown but stickers is significant enough that it's mentioned in with gaming as the main source of revenue.
Stickers, whether it's reasonable or not, are a great way to monetize on messaging.
Snapchat also allows you to find someone to talk to that no other service does as seamlessly. From my understanding anyway, people will send out snaps to a group of people, many time everyone they're connected to and after a few snaps back and forth with one or two of the responders, they'll switch to another channel and chat. One could argue adding messaging here would increase the stickiness, but I think snapchat is right in that adding it in would just be distracting.
Re: Snapchat is Intrinsically Worthless
#38I'll suggest a simpler framework for valuing Snapchat: probability of becoming another Facebook. If you think it has a 5% chance, then it should be valued at around 5 billion (relative to Facebook's 100 billion).
I think there is literally 0 chance for another Facebook. Google tried with Google+ - billions of dollars, millions of man hours by brilliant engineers, crazy bundling strategies by Google. Is Google+ another Facebook yet? Nope, not yet, maybe not ever. Your strategy has merit, but simply making another Facebook is not going to work now (It would have back in Myspace days). Now there is not an untapped market of peop…
Isn't the argument about instagram's valuation pretty much solely based on it's potential for usurping facebook?
There is no true social network born on mobile, and although facebook might win, I'm not sure that it's "never" going to happen
Re: Snapchat is Intrinsically Worthless
#39Irrespective of present revenue, the acquisition value of Snapchat to Facebook, Google, Yahoo and co basically puts a floor on the valuation. E.g. if I am an investor and I think Google would pay $5B for Snapchat, it makes sense to buy it at $4B. So I guess the trick is not to figure out how much revenue Snapchat will generate on its own, but rather how additional revenue Google could generate if it owned Snapchat (w…
Why would you buy it? It's probably going to die, if a big player doesn't buy it. They need to get acquired if they want to be alive and get time in order to find a way to generate revenues.
Re: Snapchat is Intrinsically Worthless
#40I'll suggest a simpler framework for valuing Snapchat: probability of becoming another Facebook. If you think it has a 5% chance, then it should be valued at around 5 billion (relative to Facebook's 100 billion).
I think there is literally 0 chance for another Facebook. Google tried with Google+ - billions of dollars, millions of man hours by brilliant engineers, crazy bundling strategies by Google. Is Google+ another Facebook yet? Nope, not yet, maybe not ever. Your strategy has merit, but simply making another Facebook is not going to work now (It would have back in Myspace days). Now there is not an untapped market of peop…
I agree. For better or for worse Facebook is the World of Warcraft of general purpose social networks, anything trying to go head to head with it will lose.
It'll probably die off eventually but what replaces it will probably look nothing like it and will exist in a much different climate.