Confessions Of A Marketing Major; Why Snapchat Denied Facebook’s $3 Billion Offer


    By Amanda Roche


    I just finished reading two articles, one named “Why Snapchat is Screwed” (by Shane Snow, CCO of Contently) and one named “Why Snapchat Isn’t Screwed” (by Azeem A, PeerIndex). From the title of these articles, we see a deep lack of understanding revolving around why Snapchat, a photo-messaging app developed by Stanford students, would turn down $3 billion buy-out from Facebook.


    According to Snow, “The fact remains: Snapchat itself doesn’t make money. Facebook bid the $3b on it in order to eliminate the threat of a future competitor, not because it’s a promising revenue source.” Would Facebook spend $3 billion to buy out a threat of a future competitor? Perhaps, but I would argue that there is much more at stake. Snow argues, “I think they’re screwed. Snapchat, I predict, will be the next Formspring or Chatroulette, that mega-hot thing that all the kids were on until suddenly they weren’t.”


    What people, and by people, I mean business people, do not understand about Snapchat is that a product like Snapchat is more than a “product” – it is a unique idea that has significantly gained traction in today’s youth (and increasingly older) market. Snapchat is not just a “mega-hot thing” (sorry, Snow). The problem with so many of the articles surrounding Snapchat is that they are written by people who are obviously non-users of the product. They don’t understand how – at it’s core – Snapchat is a significantly different application from Formspring or Chatroulette. They don’t understand why Snapchat, like Myspace, Facebook, Instagram, Vine, and it’s predecessors, have gained social media lives that will endure much farther than their “mega-hot” colleagues. And how important and valuable this market traction makes this application.

    Azeem (Why Snapchat Isn’t Screwed) seems to be on the right track, but he underestimates the idealism that Snapchat and it’s founders, Evan Spegiel and Bobby Murphey, represent. These are founders who named their app mascot “Ghost Chillah” after the Wu-Tang Clan’s “Ghostface Killah.” Azeem contends that Snapchat could use branded stickers, branded content, targeted advertising, a premium version, or even a gaming platform to generate revenue and eventually find a “decent, sustainable way to make money.” Snapchat, however, isn’t worried about making money – their ranking in the App store and their prevailing intimacy with their users proves Snapchat’s value, just as Instagram before them. Snapchat has something that 95% of applications do not have – a consistent, connected audience of users that value the app and use it daily. In today’s world, it is hard to put a price on that kind of engagement. 



    Snapchat turned down Facebook because it was the wrong company to buy them. As Spegiel said in an interview with Forbes magazine (mainly discussing Facebook), “People are living with this massive burden of managing a digital version of themselves. It’s taken the fun out of communicating.” The value of Snapchat lies opposite of Facebook – it is spontaneous, frivolous, spur-of-the-moment, and it is ephemeral. Your Snapchat photos will not reach your next potential employer, and unlike Instagram, your photos will not show up in a Google search of your name. Snapchat’s Evan Spegiel and Snapchat users understand this more than anyone else – so please, if you are not avid users, stop writing articles about Snapchat’s profitability – no one cares. 



    As an MBA student at Rollins College Crummer Graduate School of Business, Amanda concentrates in marketing and advertising. Amanda’s interest lies on connecting customers with companies in creative ways. Currently, Amanda works as marketing coordinator at local Orlando tech firm Crunchy Logistics and does freelance social media marketing for clients such as Sarah Sprinkel, Vice Mayor of Winter Park.