look, I am all for giving snapchat the benefit of the doubt (or I did a long time ago) it was actully the classic zuckerberg boardroom story peter theil tells all the time, except zuckerberg was yahoo to snapchat(i think yahoo was the aquirer but IDRP). Mark Zuckerberg was a the full package, a super talented developer and shrewd business man. Maybe he was cocky, maybe he was super clever, but he doubled down on himself because he knew his business, he knew his customers, he knew the product, and he mapped out the next 2-5 years in his head already.
Snapchat turning him down was an echo of that enthusiasm and market knowledge. Quiet determinsim & with only that to go on, the market assumed it was a zuckerberg story: knowing much more than everyone else and being able to see the companies future.
That was bold, and that took guts to do what snapchat did, and turn down money. However, facebook grew up in a totally different time. After 7 years facebook raised slightly less than this capital raise and it was just fundamentally a better/different company. But chiefly, Facebook's value materialized after this as Mark expected it to. By value, I mean on many levels. Snapchat's has not. The product hasn't evolved (again I don't use it, but apparently) very much. Facebook, adn the team stormed pictures, mobile, developer centric apis (becoming a core authentication cornerestone and identity tool), streamlining feed data, and matching algorithims. Snapchat, to a non-user, appears to fall flat in positive significant improvements. There seems to be one feature I have read about that is relatively new, that is universally hated. It is the only thing I have read about that seems like a departure from text messages I can never see again.
First off, advertising revenue was super important and a semi-reasonable monetization strategy back then. Facebook had officially won the network effect social game. It was the beneficiary of the largest social network to exist, ever. Also, their content was aggregated and stored and has been for a decade. They have massive amounts of user data and a distribution network. You really can't replicate 5 years of content in a single place and a network that is ~1/10th the size of earth. Facebook is google for people, it is a search engine.
Snapchat does not have a clear monetization strategy and the content they have is ephemeral. If a snapchat clone came out tomorrow, snapchat wouldn't be as sticky. Snapchat looks like twitter, the poster child for massive high engagement with disposable content and horrible biz fundamentals. In fact, twitter or facebook could clone snapchat probably super easy and enjoy crazy leverage and synergy. The only reason a 3rd unknown party can't is network penetration.
The thing about twitter, is that it is a realtime sentiment protocol that allows data-mining by forcing humans to condense thoughts into a single data object called a tweet. Creating your own data transmission protocol and having end-to-end control of it has huge potential. They can distribute their api & data objects to news, politicians, entertainers, hedgefunds and also allow advertising and purchase execution.
Uniting this data object with something like a hashtag allows them to track global trends. Where as Snapchat allows you to send dickpicks to horny girls you want to sleep with. So I am all for people trying to procreate and I have even had sex once or twice myself, but snapchat has a worse monetization strategy than twitter, and they really would need a facebook size IPO to pay back investors.
FB raised 16B in a horribly botched IPO. That would 10x the last money in, which has probably horrifying ratchets and clawback clauses. So, an admittedly super popular app that has existed for 5 years doesn't justify a 16B ipo at 100+B in 2 years like facebook did unless they think they can charge like $1 like whatsapp did, but that proved to be shitty for them. Was that acq. worth it? IDK, but certainly no PE firm would do it, only a huge company based 100% on realtie social connectedness.
I don't want to hate too hard, snapchat is cool (i don't use it myself) and many people find it a staple of their day. Especially trnedy demographics like postlennials. However, if my generation (millenials) is any indication, these kids are going to have way less money, be much less willing to pay, and came out of the womb with adblock, ublock and a propensity to jump around numerous social networks.
edit: fossuser pointed out, which I had forgotten/totally missed, that post facebook/snapchat deal facebook did clone snapchat with poke in a 2 week sprint and spent the next 1.5 years hacking on it. It did fail, and they shunted the project. Here is the IBM advert fossuser was speaking about and the Evan Spiegal quote[0]
[0]http://techcrunch.com/2012/12/21/snapchat-co-founder-evan-sp...