According to
reports from the Wall Street Journal, growing messaging service, Snapchat has
spurned a $3 billion acquisition offer from the biggest social media site,
Facebook.
According to
the people briefed on the matter who spoke with the Wall Street Journal,
Snapchat has reportedly rejected the offer because of the competition from
other companies to acquire it.
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| Evan Spiegel, Snapchat's CEO. Img: AP |
One of
Facebook’s major competitor is the Chinese e-commerce giant Tencent Holdings
who owns the popular Chinese chat app, WeChat. It is believed that Tencent is
ready to lead an investment that would value the two year old Snapchat at $4
billion.
People
familiar with the matter have claimed that Evan Spiegel, Snapchat’s 23 year old
co-founder and CEO, will not consider an acquisition until early next year.
This is in hopes that the valuation of the chat service will increase as the
number of users and ‘snaps’ increase.
Facebook had
earlier tried to purchase the chat service for $1 billion but the new attempt would
be the biggest acquisition by Facebook if it was ever accepted. Facebook
acquired photo-sharing app Instagram last year for $1 billion which is still
its biggest acquisition till date.
In June,
Snapchat had a usage of 200 million messages or ‘snaps’ which has increased to
350 million by September. Obviously, the reason to hold out is very clear with
this evidence.
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Snapchat rejects Facebook’s $3bn offer