Snapchat's Big News Week And Questions About Its Worth
Snapchat has been occupying a space somewhere between people's fears — it's for porn! — and the company's pitch — a service widely adopted by young users who want a "fast way to share a moment" and feel it's consequence-free.
The app, which lets users send photo messages that can be viewed for a maximum of 10 seconds before they disappear, has grown tremendously popular among the 24-and-under set.
So popular that it's spurning multibillion-dollar buyout offers and getting implicated in child pornography rings in the same week.
To sum up the past 48 hours of Snapchat news: First, The Wall Street Journal broke the story Wednesday that despite having no revenue, the company rejected a $3 billion cash buyout offer from Facebook. The Journal wrote:
"The offer, and rebuff, came as Snapchat is being wooed by other investors and potential acquirers. Chinese e-commerce giant Tencent Holdings had offered to lead an investment that would value two-year-old Snapchat at $4 billion. Evan Spiegel, Snapchat's 23-year-old co-founder and CEO, will not likely consider an acquisition or an investment at least until early next year, the people briefed on the matter said. They said Spiegel is hoping Snapchat's numbers — of users and messages — will grow enough by then to justify an even larger valuation, the people said."
The excitement over Snapchat is certainly rooted in some key numbers and demographics. Snapchat says its usage nearly doubled just between the months of June and September this year, going from 200 million messages per day to 350 million daily messages three months later. It's teens and college students who love it because the "snaps" they send are so ephemeral.
But as it's grown, so have the questions about its real worth. The wide-eyed investor excitement has led to pockets of backlash, like this musing, from Roy Murdock: Am I Going Insane? Snapchat Is Intrinsically Worthless
Questions dog Snapchat about whether incriminating photos are ever really deleted, as plenty of reports have shown ways to secretly save images. And then, there are cases in which the images go too far.
Thursday morning, police in a Montreal suburb arrested 10 teenage boys. They are suspected of producing and distributing child pornography — "using laptops, cell phones and iPads to take picture of girls in sexual poses or performing sexual acts."
Montreal's CTV News reports:
"Officers have identified seven girls who were either coerced into having their picture taken, or who were tricked into thinking the picture would be deleted immediately.
"Many of the girls were using an application called SnapChat which is set to delete photos a few seconds after they are viewed — however the program can easily be defeated and the photos kept on a permanent basis."
The investigation shows multiple boys had access to the same "explicit" photographs of a girl and they were shared with students at two other schools, according to CTV News. This news comes just a few months after a Snapchat related prank in New Jersey also led to a police investigation of child pornography.
Of course, other social platforms, like Facebook, have faced lawsuits and other challenges related to bad user behavior. So the fact these platforms can enable seedy stuff doesn't necessarily make them culpable — or endanger their value to investors. So far, Snapchat has not responded to our request for an interview.