Most interesting is the question of how Facebook's interest is impacting Snapchat's plan to raise new capital at a big valuation (a deal that likely will include more founder liquidity). One theory is that it's an effort to make Zuckerberg increase his offer, by showing that others believe the company is far more valuable than his opening volley. An alternate – and more likely – theory is that this raise is to eliminate any temptation to sell the company, both for the founders and early investors (who may also get some cash back).
Well, it seems to have been the latter.
Facebook's original offer was said to be for between $1 billion and $2 billion, but today the WSJ is reporting that Zuckerberg later raised the stakes to $3 billion. And was still rebuffed!
At first blush, it seems ridiculous. A pre-revenue company founded less than three years ago turns down a deal that would value it at 3X what either Instagram or Tumblr got. Or at up to 3X what Zuckerberg originally agreed to take from Yahoo (YHOO), before Yahoo mistakenly got cold feet.
But there is some precedent. Groupon (GRPN), for example, famously shunned a $6 billion offer from Google (GOOG). And, as we recently learned from Nick Bilton, it seems that everyone from Zuckerberg to Al Gore has tried to purchase Twitter over the years.
More importantly, Snapchat and its investors seem to believe that this company is the next generation of social networking -- not an add-on to the dominant incumbent. Snapchat is about immediate/disposable communication, not permanent record-keeping.
Yes, some of that means sexting. But think about all of the conversations you had as a teenager that you wouldn't have voluntarily put out for public consumption (not only for your parents, but even for many of your friends). And, for millennials, a lot of that communication comes via photo, rather than via voice (or even text -- save, perhaps, for a quick caption).
Plus, there are some tangible concerns that go beyond personal relationships:
In other words, Snapchat is providing its users exactly what existing services like Facebook and Twitter and Tumble are not. Not surprisingly, some people close to the company say that Snapchat's depth of engagement is off the charts. Sure the core technology itself is fairly simple. So is Twitter's (TWTR) -- a company that also wasn't monetizing 2.5 years into its existence.
To be clear, I don't use Snapchat. But I am beginning to understand the hype. And maybe, just maybe, why it was comfortable walking away from $3 billion...
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NYSE gets Twitter... and the title.
FORTUNE -- This must be a pretty rough morning over at the NASDAQ.
First, chief rival NYSE managed to bring Twitter (TWTR) public without any of the tech snafus that NASDAQ suffered through last year with Facebook (FB). Now, NYSE gets to rub even more salt in the wound, thanks to this new Thomson Reuters infographic:
It is worth noting, however, that NASDAQ has making inroads in MOREDan Primack - Nov 7, 2013 11:46 AM ET
Twitter can shower riches on its outside board members.
FORTUNE -- Twitter does not provide its outside directors with annual salaries, but it's unlikely that they're complaining.
The micro-messaging service disclosed yesterday that its outside directors may earn upwards of $16 million in compensation this year, as first reported by Footnoted. It also seems to provide for up to $8 million per year going forward, or $16 million for a new director MOREDan Primack - Oct 23, 2013 4:36 PM ET
Twitter might not want to avoid becoming the next Facebook.
FORTUNE -- Twitter will be the largest social media company to go public since Facebook (FB) did so in May 2012, so it is understandable that many are examining how the two offerings compare.
Inherent in this discussion is that Facebook's IPO was "bungled,"a "disaster" or the "biggest IPO flop ever." It is a false history, and Twitter should pay more attention to MOREDan Primack - Oct 7, 2013 3:31 PM ET
No one wants to live through that again.
By Joshua Morgan Brown
FORTUNE -- If the modern financial media had been around in 1858, while Cyrus West Field was laying the first transatlantic telegraph cable under the ocean, we'd have been treated to hundreds of screeching headlines about the project's lack of immediate profitability -- rather than marveling at the instantaneous connection being established between two continents. I think there is MOREOct 7, 2013 11:03 AM ET
The social media darling's first substantive public filing paints a picture of a somewhat troubled and deeply unprofitable digital media company with lackluster growth and an exploding cost base.
By Cyrus Sanati
FORTUNE -- It now makes sense why Twitter initially filed its IPO in secret -- its books aren't pretty.
The social media darling's first substantive public filing paints a picture of a somewhat troubled and deeply unprofitable digital media company MOREOct 4, 2013 9:43 AM ET
Instagram video fails to excite Facebook investors.
FORTUNE -- Facebook today rolled out its Instagram video product, 14 months after first acquiring the mobile photo-sharing app.
Investors reacted kind of like you'd expect them to act when you hype a "mystery" product launch that: (a) Leaks early, and (b) Is basically a knock-off of what Twitter was already doing with Vine.
Facebook (FB) shares finished the day down 1.64%, to close at $23.91 per MOREDan Primack - Jun 20, 2013 4:16 PM ET
When venture capitalist John Malloy first invested in Waze, the company was worth just a few million dollars. Now Google is paying more than $1 billion for it. Malloy explains what he saw back in 2008, and why his bet paid off.
FORTUNE -- Google (GOOG) this week announced that it will buy social mapping company Waze for a reported $1.1 billion, beating out earlier suitors like Apple (AAPL) and Facebook MOREDan Primack - Jun 13, 2013 3:18 PM ET
A new study reports there are more U.S. jobs in math and science than previously thought, if you know where to look.
FORTUNE – As Congress debates the future of the nation's immigration laws, lots of attention has been paid to highly skilled workers graduating from top U.S. universities. The biggest names in the tech industry have lobbied to make it easier for them live and work in America. They say many MORENin-Hai Tseng, Writer - Jun 5, 2013 7:59 AM ET
The SEC showed up late to the social media party with its new guidance, and investors now have more questions than answers about how companies can share material information.
By Cyrus Sanati
FORTUNE -- Wall Street will need a bit more clarity on the SEC's new social media policy before anyone feels comfortable enough to hit the "like" button. While many on the Street accept that social media has become a MOREApr 4, 2013 12:29 PM ET
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