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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.

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...

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.

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

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

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

Exactly, who knows....

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.

I am not an investor and have very vague clue of such eccentric valuations but let me get my facts straight. An app which is analogous to a "teen trend", generates no revenue, has a very little or no clue how to either, is worth $3B? Does the brand value and niche matter more than possible potential of company, "money-wise"?

To some people! :)

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