'A measly 3 Instagrams? NO!' Sexy selfie Snapchat spurns Facebook's $3bn

The CEO of sexting-friendly messaging service Snapchat has reportedly turned down buyout offers worth at least $3bn because he expects his company will soon be worth much more. According to a report in the Wall Street Journal, 23-year old Snapchat cofounder and chief exec Evan Spiegel barely considered a recent $3bn offer from …

[Anonymous Coward]

Reality Vs. 3 billion.

Something is going to give soon, and reality will come crushing down. The nature of this ballooning beast that is micro services all depends on distracting 1 user from something else. Eventually they'll all be distracting each other, away from each other, and nobody will have time to pay attention to any of them.

Am I jealous of these guys? Extremely. Imagine becoming a billionaire from sending pictures, and only pictures? BTW, please check out my picture over there ----->

Now PAY ME!

[Cliff]

Re: Reality Vs. 3 billion.

That one user is a cost. 'We lose a dollar on each but we make it up with volume' was never truer. Someone offers you $3Bn *cash* for anything, the right answer is 'fuck yeah (sucker)'

No doubt we'll see him moping to the business press in 5 years and get his business lessons book in 10. Should be titled 'Don't be greedy'

[Piro]

Re: Reality Vs. 3 billion.

You have to be one arrogant bastard not to take $3,000,000,000 in cash for a shitty little business based around people sending images to each other.

One, I should add, I have never heard of before this article.

[Tim Jenkins]

Re: Reality Vs. 3 billion.

"...reality will come crushing down..."

Like the reality that, out of the 350 million images A DAY they claim are flowing through their servers, a fairly massive number are highly likely to be illegal in most jurisdictions, and sooner or later some publicity-seeking politico is going to go for the obvious headline...

[Jamie Jones]

Re: Reality Vs. 3 billion.

I agree. When you gamble away a cool 3 billion, you must need your head examined..

Especially, as you say, the lawsuits will start coming - not to mention that once people realise that you CAN'T make such a system work as designed, what is there left of 'value'?

Ok, the typical targetted audience may not be able to override the deletions - after all, they are the same people who think it's secure in the first place; but all it takes is for someone to release an app to automate it, and their reputation will be in ruins.. At which point, a desperate game of cat and mouse will be their only other option.

[El Richard Thomas]

Re: Reality Vs. 3 billion.

"all it takes is for someone to release an app to automate it, and their reputation will be in ruins"

Already done:

http://www.huffingtonpost.com/2013/08/09/snapchat-snap-save_n_3732477.html

[Anonymous Coward]

Re: Reality Vs. 3 billion.

The reality is that there is evidently still one born every minute. With money to waste.

To me, the whole share dealing concept has gone the way of art: it's just an excuse to push money around and upwards. I can't see the value here, sorry, but some idiots have set a precedent which means other people will follow, people who ought to know better.

/shakes head

[lunatik96]

Political life might be saved now

Anthony Weiner (Aptly Named)just tweeted "Damn, where was that app when I needed it?"

at lest those kitten pics will self erase. Makes one think of the mission impossible theme. But can you wait to view the kitten or will it time out whether u watch or not. I mean if I was landing a 747 and I got a new kitten pic from my bestie, can I wait?

[Maharg]

Re: Political life might be saved now

It doesn’t delete the photos until after the photo has been viewed in the app and the time limit set has expired, you get a list of the photos have to open the app to view the list of images sent, and once you click on an image to view that’s when the ‘timer’ starts and deletes after a time limit set by the sender.

Not that I use it, no one wants to see dodgy photos of me 

[Cliff]

Re: Political life might be saved now

http://arstechnica.com/gadgets/2013/11/ten-boys-arrested-for-child-porn-distribution-connected-to-snapchat/

That $3Bn offer will seem quite generous as things like this hit the main press.

[ecofeco]

Turns down 3 billion?

There will never be a high enough offer for THAT much ego.

3 BILLION?! I'll never see a TENTH of that in my life! Not even 100th!

What a knob.

[Anonymous Coward]

Re: Turns down 3 billion?

>I'll never see a TENTH of that in my life! Not even 100th

So a 1000th is possible, lucky git, that's still 3 million.

[Cliff]

Re: Turns down 3 billion?

People bandy the terms million and billion around almost interchangeably, because the human scale finds any number over a few, many; over many, lots; over lots, shit loads.

To make it more human, a million seconds is 11 days, a billion seconds is 31 years. A billion is a really really big number!

[Annihilator]

Re: Turns down 3 billion?

" a billion seconds is 31 years"

Bugger. Wish someone had told me that on my 30th. I'd have quite liked to celebrate my billionth second birthday.

Roll on 62...

[Cliff]

Re: Turns down 3 billion?

Yeah, dammit, I missed my own too. Gutted. But maybe you can still catch a power of two? 2^30 seconds gives you another chance shortly afterwards, just over 34 years

[SVV]

This news has cheered me up this evening

I'm just imagining the look on this 23 year old's face when he finds out that his company is no longer worth that much, because somebody finally realised that a copy of his ludicrously overvalued website's functionality would not cost anything like so much to build.

FFS, you could have had a gold plated private jet and your own tropical island at the age of 23 because of the current mini social app based dot com boom silliness and you turned it down because you thought you could spend even more than that in a single lifetime if you just hung on for more........

Of course, my predictions could be wrong, but I can't be the only person who looks at these things and thinks "Well, all the current popular sites could implement that in a few weeks / months"

[Anonymous Coward]

Re: This news has cheered me up this evening

You and others are assuming he get's all the dosh himself. According to the article he's taken money from venture capitalists and the phrase "most recent funding round" would imply he has funding from quite a few sources so his personal share could realistically be around the 10% mark. If in the next round of funding he's going to reduce his own stock then his share will be even less. Still a lot of money but nowhere near the headline figure. Personally it sounds as if he's relied on too much funding and needs a larger amount to get a decent sum for himself.

[Mike Brown]

Re: This news has cheered me up this evening

I concur. I definitly wouldnt sell my virtually worthless app for 10% of 3 billion. no sirree bob.

[Anonymous Coward]

Re: This news has cheered me up this evening

The chap is early twenties, 300 million is a lot now but it's hardly enough to live a life of luxury for the next fifty or sixty years. Your pereception is what sells retirement plans, you look at the figure you'll get after 40 years if you believe the pusher and think about what it will buy today.

[Tromos]

Re: This news has cheered me up this evening

If your definition of luxury necessitates solid gold cars and private jumbo jets, etc., then it is hardly enough. If you can make do with half a million a month, which is easily achievable even with current low interest rates, then I think one could scrape by without using up (and even modestly increasing) the capital sum.

[Anonymous Coward]

Re: This news has cheered me up this evening

Do you realise that fifty years ago the average house was less than 3000GBP, today, after a few boom and bust cycles, it is almost 250,000. That is average not luxury. Using a simple extrapolation fifty years into the future an average house will cost more than 20 million. Lets's be very generous and say average salary rises in line with house prices, todays average salary of 30,000 will be 2.5 million.

A 190 million GBP lump sum is just about enough to live an above average life for the next fifty years, certainly not luxury.

Oh, and 190 million GBP wouldn't even buy a single 747, so he'd have nowhere near the sort of lifestyle of those who have their own jumbo on call 24/7.

[Annihilator]

Re: This news has cheered me up this evening

"A 190 million GBP lump sum is just about enough to live an above average life for the next fifty years, certainly not luxury."

You've extrapolated up costs and inflation, but not calculated net present value of the £190M to balance it. Or considered what the money will be turned into - you use a house as an example, consider the house they buy will increase to the same level of worth. Not to mention how they invest the money.

[Piro]

Re: This news has cheered me up this evening

Yes, it is. If you were given $300 million and you couldn't live the rest of your life comfortably from it, you have money managing skills worthy of Michael Carroll.

Even if you had it in nothing other than the safest possible and lowest return investments, looking at that base figure, that would take you 60 years @ 5 million a year, you should trivially be able to return greater than or close to inflation through those years....

... But with even a modest amount of money shuffling, you should be able to return far greater than inflation, so yes, you're looking at a lifestyle afforded by $5 million a year in today's money, for the rest of your life.

If you think $5 million a year isn't enough to live comfortably, I don't know what else to say.

[Gene Cash]

Is this his Jerry Yang moment?

[JeevesMkII]

There ought to be a name for this kind of hubris...

Zero profit startups rejecting massive buyouts because they think they shit gold bricks.... It needs a name... I'm sure there's a Digg pun to be had but it's not coming to me this late at night.

[Ralph B]

Re: There ought to be a name for this kind of hubris...

> It needs a name...

Old-rope-gift-horsery?

[Cliff]

Re: There ought to be a name for this kind of hubris...

'Greed' any good?

[Scaffa]

It's laudible if his goal is to become the next google or facebook, rather than the next startup they bought out.

However, I would've qualified success as being bought out for $3billion too.

[The Vociferous Time Waster]

Forever blowing...

Tech's forever blowing bubbles. Nerds come up with stuff then sales chimps tell the world it is a revolution and people who know nothing about tech buy in to it. Eventually the accountants point out there is no real money to be made and lots of people realise they were fleeced.

We have seen it before from infrastructure to software to Web 1.0 - the whole Web 2.0 thing was just clever sales speak for 'this time you won't get boned I promise'

Notable exceptions are those services that fill a need or create a need while making actual money cf Google, Facebook.

[ecofeco]

Re: Forever blowing...

Make that "well connected" nerds, because honestly, they are the only ones who get that kind of funding.

[Anonymous Coward]

1998 called

It's like deja vu all over again (Y Berra)

[Anonymous Coward]

Re: 1998 called

But at least this time the accounting system isn't going to fall over in under 2 years.

Though this also means there won't be any work for the unemployed dot-com-mk2 brigade.

[Mtech25]

Ahh the social media Bubble

- Companies with vague plans on how to turn a profit

-People convinced that the only way is up

-Companies spending large amount of cash for no gain

-investors fling large amounts of cash at companies which have yet to make money

Any of this starting to sound familiar to people?

In fact when is twitter next annual report I wonder if i have enough tim to stock my bunker?

[Anonymous Coward]

Forget that. If he's being a dick go and see the people who made "snapsave" and offer them $1bn.

I'm sure for every copy of snapshots around half have a parallel install of "snapsave" too.

[jason 7]

Oh dear.......

....you know the next offer they get will be $50 million take it or leave it.

In such situations I always remember that scene in the 'Adolf Hitler Diaries' when Murdoch offers the German newspaper x million for the rights and they sit there smug asking for double, thinking they are in total control.

Murdoch (played by Barry Humphries) simply says nothing stands up and walks out. The Germans completely crumble.

Total control switch. Quite a powerful scene actually.

[GrumpyOldMan]

Self-erase? really?

Wasn't there a system that 'self-erased' a year or 2 ago that slipped up and all those images suddenly re-appeared? And if FB get hold of it do you really think they will let all those lovely images delete themselves? Well, maybe - after they've stored a copy in their datacenter. And as so many people have said - the guy needs a reality check! Take the money and run!

[User McUser]

How is $3x10^9 not "big bucks?"

Spiegel is reportedly holding out for the big bucks.

Can somebody get this kid a Math book or something?

[Risky]

grams or Instagrams?

I think the only explanation for rejecting the offer is that some of the current investors' cash has gone up his nose......

[squishysdomain]

Thats a $ for pretty much every internet user on the planet?

Theory goes that its the number of users of the service that drives the value of these services, that somehow this is sticky, so the guys waiting for everyone to install it before cashing in. I'm sure most users are not as sticky as these companies think they are. For instance I've stopped using Skype and Twitter as they have ceased to have any value for me.

I have no idea where any of these social media sites will get their multiple $ per user payback from. I have never knowingly clicked through an advert from Facebook never mind bought the item that it was advertising. Also most of the free games on my phone just seem to advertise other free games. Where is all the money supposedly from? One thing seems to be clear - there's not enough advertising $ to fund all of these free apps. Sooner or later the bubble will burst (as it did with semiconductors 10 years ago) and investors will be rushing on to the next big thing.

[Anonymous Coward]

seems like a silly app

Are they banking on the fact that people don't know how to do a screen capture on their device? You can send someone pictures that "disappears", but they can easily take a screen capture before that happens. Home+Power on iPhone or power+volume down on Android will do it.

[Mitoo Bobsworth]

Expensive porn.

Facebook may want to think again after this little incident -

http://arstechnica.com/gadgets/2013/11/ten-boys-arrested-for-child-porn-distribution-connected-to-snapchat/

[Christian Berger]

Just like the multimedia CD bubble

Remember it. It was in the 1990s when everyone thought the future would lie in Macromedia generated content on CD-Roms... you could buy quote databases and CD-Rom encyclopaedias. Of course the only thing that's left from that time is the Flash Plugin.

The whole app business will implode after internet access on smart phones becomes ubiquitous, and once web designers learn how to optimize their code.

Anyhow for Snapchat it won't matter. If they are that stupid, they may have gone through their 1.5 Billion each in a couple of years anyhow.