(Not) Snapping the Chat
In another sign that we might be (yet again) in the midst of a high-tech bubble, short messaging service Snapchat (which I have hardly heard of) has reportedly snubbed a $3 billion buyout offer by Facebook. The mobile social media service, with no revenue and no business plan to speak of, obviously feels that it has room to grow and is eyeing even higher dollar figures, or even becoming a strong social media powerhouse in its own right.
I love social media, I am on Facebook and Twitter all the time, but I still don’t see these services having much of a direct marketing and business potential. The ones that are profitable certainly don’t deserve the high market valuations based on their profits. And any tried and tested way of increasing the profits inevitably involves some kind of increased advertising, which has the tendency to grate and annoy the users.
Another take home message from this Snapchat story is that Facebook seems to be feeling the heat about the declining number of teenagares and young audults who are (not) using its services. I am not sure what is the biggest significance of this drop: loss of revenue due to the most impulse-driven shoppers, or the potential loss of users down the road as this generation gets older.
About the Author
Bojan Tunguz
Bojan Tunguz was born in Bosnia and Herzegovina, which he and his family fled during the civil war for the neighboring Croatia. Over the past two decades he has studied, lived and worked in the United States. He is a theoretical physicist with degrees from Stanford and University of Illinois. Tunguz has taught physics at several prominent liberal arts colleges and has been writing about physics, science and technology for more than a decade. He also has a wide spectrum of interests, and reads and writes about current events, society, culture, religion and politics. Over the years he has reviewed many of the books that he has read, and posted his reviews on various online outlets. In 2011 he had become a top 10 reviewer on Amazon.com, where he continues to be very active. Aside from reading and writing, Tunguz enjoys traveling, digital photography, hiking, and fitness. He resides with his wife in Indiana. You can follow my review updates on the following pages as well: Facebook: http://www.facebook.com/tunguzreview Twitter: http://www.twitter.com/tunguzreviews Google+: https://plus.google.com/u/0/104312842297641697463/posts
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