Yahoo! bought Tumblr for $1 billion. Facebook bought Instagram for $1 billion. It's a nice, round number for tech companies that have value but no real profits. But the Wall Street Journal reports Facebook coveted Snapchat so much they offered $3 billion, in cash, for the disappearing messaging app. The Snapchat guys told Facebook to take a hike.
Turning down $3 billion takes a lot of balls, something the Snapchat founders have in spades apparently. Others may contend they lack something equally important: brains. Turning down $3 billion when your company makes no revenues is remarkably stupid. (Or incredibly brave.) But, according to the Journal, the recent spurned $3 billion offer wasn't the first time Snapchat rejected Facebook's advances:
Facebook had earlier offered to buy Snapchat for more than $1 billion, the people briefed on the matter said. In recent weeks, Facebook representatives contacted Snapchat again to discuss an all-cash offer that would have valued Snapchat at $3 billion or more. At that price, it would be Facebook’s largest acquisition, more than double its nearly $1 billion deal for photo-sharing social network Instagram in 2010.
Snapchat, which has about 26 million users in the U.S., is trying to fundraise from investors at a valuation of $3-to-4 billion right now. It's unlikely the company will be sold, to anyone.
The news of rejection might explain why Snapchat and Facebook had an odd, public feud when the app first exploded on the scene. It's no secret Facebook had something of a crush on Snapchat during the messaging app's early days. Facebook immediately tried to create a copycat app, Poke, which landed with a loud thud. The app failed to capture teens' attention the same way Snapchat has, despite some personal coding touches from Mark Zuckerberg. (A rare event these days, as the boy genius who built the company mostly handles executive duties now. He rarely gets into the trenches and puts fingers to keyboard.)
This article is from the archive of our partner The Wire.