Snapchat is one of the most widely used mobile apps that allow its users to send photos that will automatically delete after a few seconds. This has taken the market by storm as there are very many teens who love to use it. It has been in the market for about two years with more than 350 million photos sent every month. Despite the fact that it has no revenue, there are a number of companies that are after it such as Facebook (NASDAQ:FB) which offered $3 billion and Google (NASDAQ:GOOG) which offered $4 billion. Why you may ask? Read on to find the reasons.
Snapchat uses scalable technology
The app makes use of scalable technology which means that it has the potential to grow without any help from any quarter. Experts say that new and emerging technologies cannot really be trusted as they are not dependent on a strong platform that paves way for great growth. For this reason, the companies are interested in it so that they can be able to protect their leading positions as they will get an equal footing with all the new communications apps that are developed along the way.
Sharing of photos
For a company like Facebook, sharing photos is one of the core businesses that it relies on. Snapchat on the other hand is fast becoming one of the biggest platforms for sharing photos that people like to use. This is not good for Facebook as it might imply that it might loose some of its users who will prefer to use the app instead of the social media platform. It therefore makes sense for Facebook to buy it out so that it does not have to deal with the excessive competition that may set it back.
Snapchat is developing an incredible “social graph”
Over the years, the app has proved that is it developing a very unique social graph that the big tech companies are highly interested in. Most of these companies normally work on understanding the social graph as well as the interaction between users so that they can offer products that are well suited for the market so that they can succeed in a huge way. This means that the companies may want to buy it out so that they can be able to utilise the key new set of social data as the app continues to grow.
Another reason why some big tech companies like Facebook might want to buy Snapchat is the fact that some people who have never even used the social media platform are interested in the app. There was a time that Facebook has lost its appeal to many teenagers and that they view it in the same way adults look at LinkedIn. Some say that is not super cool and they would rather not hag out there. This part of the market that Facebook is loosing out on is going to the app. This means that the site can reclaim some of the people it is losing when they buy it out.
