

Ask HN: How much do you think SnapChat is really worth? - bryang

With the gossipy 3 Billion acquisition talk going around, I&#x27;m curious to learn what the HN readers believe to be a proper or more logical valuation for SnapChat (which does not have any immediate or pending revenue sources)
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imsofuture
$0

I hadn't heard of SnapChat until this acquisition story broke. I guess I'm out
of touch or something?

Anyway, no revenue and no real hope of revenue = $0. VC can blow smoke up your
ass until they collapse, blue in the face, but it's not a winning proposition.

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essersteven
You are out of touch. For those < 30, SnapChat is one of the most popular
social networking apps. It may not be generating revenue now, but there has to
be some value in it for the amount of users it currently has.

edit: but yea, I think $3 billion is a little high...

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WhiteFoxx
Theres a difference between having value to users because its a decent app and
they get to use it for free, and generating revenue from those users. Ask
those users to pay and they will leave in droves.

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coralreef
Getting users to pay isn't the only way to make money.

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WhiteFoxx
Thats true. But what have they really got to sell?

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coralreef
Who knows. Pre/post roll ads on snaps. Stickers...

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WhiteFoxx
Exactly, who knows....

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001sky
Which is a problem for advertisers. not to be meta, but its true. marketers
want to but mindshare, and they want to make sure their pitch is not going to
be taken out of context. not knowing what your pitch will look like in context
is usually a non-starter for ad sales guys. Of course SnapChat may not want to
deal with advertisers as that would require tracking and verification, which
might put off some end users as well. That seems to leave fewer possible
business models. Although they may invent something new, so lets not count
them fully out.

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brotchie
$3bb

Supply-demand. If there's a suitor willing to drop $3bb on Snapchat, then
that's the market clearing price is it not?

Given that Snapchat didn't accept, perhaps it's worth a tiny bit more.

~~~
misterparker
when someone rejects the demand, it doesn't mean it's worth more, unless there
is someone else willing to offer more. But you're dead on that it's worth
whatever someone is willing to pay for it. "worth" is a tricky word. We
default to thinking that all things have an intrinsic value, when really
nothing does. The value of something is only equal to what someone is willing
to do to obtain that something.

People think gold has this intrinsic value, but does not either. It's
"natural" value is also soley based upon the demand that is put upon it. The
fact that people find it beautiful, and that is a great conductor of
electricity, are things that are desired about it. And so the more people that
discover the uses of gold, the more demand grows.

If there were no googles, or apples, or yahoos, or any of these huge companies
with really deep pockets, then there would be no one to offer $3billion for a
company like snapchat, and there would be no way it could ever obtain a
"worth" of 3 billion. Because, again - anything is only worth what someone is
willing to pay (or do) to obtain it. Even your job.

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ktran03
As much as someone's willing to pay.

Personally, it does not surprise that FB is willing to pay 3B. FB is
struggling with the younger crowd as of late, it's a great strategic move in
my opinion.

~~~
bryang
"As much as its bought for" is a popular response when I've asked this
question. I guess it comes down to sematics - is value sort of like Net
Revenue Versus Revenue? Amazon makes boatloads of revenue, but still hasn't
seen the return it wants. How does this affect the value of the company? The
stock buyers apparently don't care...

I think these sort of app related multi-billion acquisitions with little or no
revenue are a complete farce and do more harm than good - especially when it
comes down to a product with NO revenue. It's basically disregarding
capitalist business principles for shallow popularity.

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poseidon
@BoredElonMusk tweeted "I offered Snapchat zero dollars and am pretty sure I
would have overpaid.", source:
[https://twitter.com/BoredElonMusk/status/400701171272130560](https://twitter.com/BoredElonMusk/status/400701171272130560)

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pathy
The problem I see with Snapchat is that:

a) currently no revenue, I imagine it is harder to monetize Snapchat than
Facebook et al. But it is not my area of expertise so I can give them the
benefit of the doubt that they can monetize it.

b) They are one lawsuit away from blowing up. I can see a future where they
get hit with a child porn lawsuit or something similar. I assume they have
good lawyers but it is still a rather significant risk.

I think it was a mistake not to take one of those billion dollar deals but I
have been wrong before. If they can monetize their service and avoid lawsuits
it could become huge.

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anywherenotes
I think social media services can grow extremely large, but monetizing turns
people off. Facebook is tricky, because the data you post there is available
forever, I fully expect to use facebook 30 years from now to look at my kid's
pictures (that I take and post now). This is very different from a blurt on
twitter or a video designed to disappear in seconds.

I can't imagine these services being worth as much as facebook, and I don't
know what they're thinking turning that amount down. They have no revenue.

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davehimself
I said, "SnapChat! What you want?... He said, 'I need about tree-fitty'"

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nicholas73
It's really just another Instagram purchase. Posting photos is one of FB's
core features, so FB is putting out any fires before they can grow. It's like
Yahoo buying out Google before it can ... oh wait.

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gesman
You mean the cost of the porn side of it?

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bryang
I've been thinking about making an app called ScreenSnap that takes screen
captures every time a naked body appears on the screen... ;)

~~~
gesman
It'll quickly drain the battery....

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sixQuarks
At least $29.95

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davidsmith8900
\- As of now, 0.5 Billi with a potential of around 7 Billi.

~~~
krrishd
Well, that's just silli.

