

Yahoo Nears Investment in Snapchat - uptown
http://online.wsj.com/articles/yahoo-nears-investment-in-snapchat-1412361684

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korzun
You know why Alibaba is profitable? Because they don't make stupid investments
like this one.

First Tumblr and now this. Yahoo should stop playing 'save a VC'.

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bpodgursky
Alibaba is a pretty bad example to use, because Yahoo made $9.4 billion
because they DID invest in Alibaba early on.

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korzun
Actually it's a perfect example.

Jerry Yang made the investment in Alibaba circa 2005. If you told him Yahoo!
will be investing in Snapchat he would probably laugh at you.

Now in 2014, Yahoo! is buying a blogging platform and investing in picture
messaging with a timer.

The driving force overseas is money, money, money. Not impressions or # of
useless users.

Comparing Alibaba investment to Snapchat is simply absurd.

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smtddr
I'm going to have to eat my words at this rate:
[https://news.ycombinator.com/item?id=6824666](https://news.ycombinator.com/item?id=6824666)
...

I really don't understand this. What is so special about snapchat? What future
does this thing have? Can Evan Spiegel see the future?

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bcn
For more perspective on this question, I'd recommend this recent video (~6
min) by Casey Neistat -
[https://www.youtube.com/watch?v=kKSr6h5-fCU](https://www.youtube.com/watch?v=kKSr6h5-fCU)

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memnips
As someone of the "Facebook generation", I have to say my mind was blown by
this video. Thanks for sharing.

I feel there is clearly a trend line one could draw here in the evolution of
social networking and social media. Since the initial era of social
networking, friction was reduced (e.g. Instagram / Twitter) and now it's
moving to be both frictionless and ephemeral (Snapchat).

It's interesting because the trend almost leads you something like life
broadcasting (e.g. Justin.tv) - but we've already been there. I wonder what
the next phase will be.

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uptown
For non-subscribers:
[https://www.google.com/search?q=Yahoo+Nears+Investment+in+Sn...](https://www.google.com/search?q=Yahoo+Nears+Investment+in+Snapchat)

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theklub
Man, its worth $10bn but doesn't make any money, that's pretty amazing.
Another solid investment by Yahoo.

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nashequilibrium
"Separately, this week Yahoo continued its acquisition spree of small startups
with the purchase of another mobile messaging company, MessageMe, according to
two people familiar with the deal."

This is why activist hedgefunds are lining up to destroy Yahoo and make a
buck. The board clearly complained about Marissa bailing out failed silicon
valley startups for millions. Messageme was an unoriginal product created by
people with a favorable track record but the actual product had nothing to
offer users except growth hacking by using the facebook friends graph api.
Spending millions on this aquihire makes no sense.

What Yahoo needs is a core product that is a big win, Marissa said Tumblr
would bring this, but instead we have seen competition on mobile increase and
time across social media and blogging apps fragment. We have seen them lose
their weather app monopoly on ios and yahoo mail on mobile is not gaining
traction. Across the hot core areas being, search, social, cloud services,
document services, smart hardware and artificial/assisted intelligence, yahoo
is nowhere to be seen. Yahoo needs to seize the initiative and focus on a core
competency and win big.

Snapchat at a $10 billion valuation has too much risk for someone that needs a
big win. It really seems like snapchat investors are running some kind of pump
and dump scheme the way they pushing this valuation. As things stand Snapchat
has to go public to make good on a $10b valuation.

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rubyn00bie
Ah yes, Yahoo investing in another company with no hope of actualizing it's
valuation by actual revenue (as opposed to investors bloating it until an
IPO).

I'm sure it'll look great next Tumblr...

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bduerst
"Revenue" isn't the only thing that companies compete for.

Many of these online services companies (Google, Facebook, Yahoo) compete for
user timeshare - e.g. you're awake 16 hours a day, how many of those hours are
spent under company X's umbrella?

Tumblr had doubled their number of blogs and grown their userbase by 1/3 since
being acquired. The jury is still out on whether it was a good or bad
investment.

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jgalt212
I read Tumblr was a few weeks away from running out of cash at the time Yahoo
bought them. While I agree the jury is still out on the Tumblr/Yahoo
acquisition, I do think they could have bought a nearly insolvent company a
bit cheaper than they did.

That being said, maybe they did get it on the cheap if WhatsApp went for $19B.

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argonaut
Exactly. How do you know the price they acquired Tumblr for wasn't its
"insolvent" price? There was probably competition for the deal - passing in
the hope of getting a lower price is dangerous if you know other players might
snap up Tumblr.

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loceng
People seem to not take into consideration the concept of staying in the game.
Facebook bought WhatsApp for the users, not necessarily to become Facebook
users but to prevent them from becoming users of a competitor. Yahoo needs to
make acquisitions so they can stay relevant and connected, otherwise they may
not have any chance of succeeding in a much bigger way with all of their
offerings.

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korzun
> concept of staying in the game

That's actually the opposite of that concept. WhatsApp actually solved a real
problem and aligned closely with Facebook's overall strategy (communication).

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mcintyre1994
WhatsApp definitely solved a problem when they launched and they did an
incredible job, but I'm not sure what I'm missing, what problem were they
solving when Facebook bought them That Facebook couldn't? I'm not saying it
was a bad investment - I think it was smart, but to me it just seemed like
Facebook Messenger and WhatsApp were competitors by the time Facebook bought
them.

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thrownaway2424
This would be an amusing way to funnel lots of money directly into Google's
pockets, I guess.

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iaw
I get the feeling they'll do better on this than they did on Ali Baba

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JonFish85
Weren't they recently valued around $10b[1]? They'd need to grow a _lot_ to
make Alibaba-level money on Snapchat. And Snapchat would have to really find a
way to monetize eyeballs without losing them.

[1]
[http://money.cnn.com/2014/08/27/technology/innovationnation/...](http://money.cnn.com/2014/08/27/technology/innovationnation/snapchat-
valuation/)

Edit: Apparently the round hasn't closed yet, so they would be a part of the
$10b round. I think my point still stands!

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no_future
how does yahoo actually generate revenue now? the only people I know of that
mainly use Yahoo mail are in countries like India where ads are worth next to
nothing, and nobody uses Yahoo search. Is it just from ads on their
properties?

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cwe
These days it seems to be from investing. Alibaba, now apparently SnapChat.

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prostoalex
That does not constitute revenue under accounting rules.

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jefthegreat
God please Melissa do not buy anything!

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no_future
Yahoo right now(and when they bought Tumblr)

[http://a.pomf.se/gsxzwx.jpg](http://a.pomf.se/gsxzwx.jpg)

