FOR THOSE under 25, the phrase, “Send me a snap!” needs no explanation. For those a little older, I’ll explain. Sending a “snap” means sending an image (most likely a selfie) to your friends using the app Snapchat. You can draw on the image or add a caption, and even decide how long friends can view the image – 10 seconds at the most – before it disappears forever.
While this idea may sound slightly pointless, and maybe even worthless, Facebook clearly doesn’t agree – the social media network has reportedly offered to buy Snapchat for $3bn (£1.9bn).
Co-founders Evan Spiegel, 23, and Bobby Murphy, 25, two Stanford University dropouts, have turned it down. The pair created Snapchat in September 2011 with the idea for a more fun, ephemeral form of social media with moments that can be “shared, enjoyed, but not saved”.
“We believe in sharing authentic moments with friends. It’s not all about fancy vacations, sushi dinners, or beautiful sunsets. Sometimes it’s an inside joke, a silly face, or greetings from a pet fish. Sharing those moments should be fun,” the co-founders say. A year after its launch, 20m snaps were being shared daily. Today, that number has risen to 35m. Spiegel claims that the app is now on a quarter of all UK smartphones.
It’s even more popular in the US. Snapchat is the seventh most popular free app in the iTunes store, and according to the Pew Research Centre nine per cent of American mobile phone owners use it. Among 18 to 29 year-olds, that percentage is even higher, at 26 per cent. But, as is the case with Instagram and Twitter (despite its stellar market debut) popularity doesn’t necessarily mean profits. To date, Snapchat hasn’t made any revenues; it’s a totally free service and unlike Facebook and Twitter, it doesn’t even feature advertisements. Instead, the company relies on outside investors, which include General Catalyst, Benchmark Capital, Lightspeed Venture Partners, and SV Angel. In a Series B funding round last June, Snapchat raised more than $60m from investors, valuing it at more than $800m.
As for that potential revenue, Spiegel revealed in a BBC interview yesterday that the company plans to add services to the app that users would have to pay for. He admitted that Facebook and Twitter users are not used to paying for content, but claimed people don’t want to pay for these social media platforms because they are viewed as utilities. Snapchat on the other hand, he explained, is entertainment and “people will pay a lot for entertainment”.
Time will tell if Spiegel’s revenue model will pan out – and if rebuffing Facebook’s multi-billion bid was the right move – but with other offers rumoured to be on the table, he’s unlikely to be friendless for long.
Emily DiCicco (snapchatted above) is an undergraduate at Temple University, Philadelphia