6 ms·

Sure, but what precisely are they planning to spend $4B on?

TAForObvReasons 10y ago
Building a war chest to purchase the next company or act quickly. You need to have the cash on hand, and that can't happen overnight. They need not spend the money today.
- josho 10y ago
  That's typically a bad reason to give to an investor.
CN7R 10y ago
Considering Snapchat revealed Spectacles, which in my mind was an unexpected hardware development, they could use funding for side projects and expansion. Hopefully, they don't become like Twitter and waste all that money for so little gain.
- adamnemecek 10y ago
  I'm pretty sure that they will write these off evetually. To me they feel very similar to Google glass insofar the customer bases being somewhat similar, maybe spectacles' being somewhat younger.
  - CN7R 10y ago
    IMO, Google glasses were an obtrusive form of eyewear with limited AR capabilities—with a price tag of $1500. Spectacles are $130.
    - adamnemecek 10y ago
      You are right they are quite a bit cheaper but they are just as obtrusive. I think that glasses (esp. dioptric) are fundamentally a part of your identity and I think that most people fundamentally hate associating themselves with a company not to come across as a 'fanboys'. Like wearing the snapchat glasses projects a certain type of persona which I think most people might prefer not to project. I think that they should be marketed as "cool glasses (that also record video)" as opposed to "video recording glasses". "Video recording glasses" are a gimmick, "cool glasses (that also record video)" could be timeless.
      - nateburke 10y ago
        My initial impression upon seeing the spectacles was that they had two cameras. They don't, but the impression points to a key design choice that was, IMHO, fatally absent from Google glass: attempted symmetry. I think that people will be more likely to wear the spectacles for this reason--they can actually pass for a pair of somewhat ostentatious sunglasses to an unknowing observer because of their near-symmetry, vs. Google glass, the mere shape of which screamed "BORG!"
      - CN7R 10y ago
        Have you heard of Raybans? The merger of fashion and technology is possible, considering the existing fanboyism of some products and design of smart watches.
  - tashoecraft 10y ago
    Google Glass and Spectacles are not even close to the same customer base. Google glass was a luxury beta product for techies with lots of disposable income. Spectacles are targeted towards 15-25yr olds. Google Glass users wanted to use the "future" of technology where as spectacles users want to Snap and share more. I'm surprised their hasn't been nearly the same adverse reaction to spectacles as there was to glass. Maybe we haven't seen it yet as they haven't been released, but people hated the potential of Google Glass sharing pictures and videos of people without them knowing. Maybe we've changed as a culture enough in these few years.
    - reneherse 10y ago
      Good observations. The difference with Spectacles is playfulness and fun: kids goofing off for the camera on a beach vs normcore cyborg narrating on a bluetooth headset. A potential weakness of Spectacles as a product is that it augments only non-selfie, "extraverted" photography. So it doesn't engage the selfie obsessed side of the userbase as much as the phone-based AR filters do. I haven't been a fan of Snapchat, but now I'm curious to see how users react to this product.
    - deleted 10y ago
      [deleted]
    - bogomipz 10y ago
      But do the majority of 15 - 25 Snapchat users have $130 to spend on these? I'm asking because I don't know. Also sunglasses seem to get forgotten/lost somewhat regularly no?
      - soundwave106 10y ago
        Designer sunglasses can easily cost more than $130 and some 15-25 year old people do find the money to spend on them. So the real question is more has Snapchat and its functionality built enough of a cachet to be valued as highly as something like a Ray Ban. I do wonder about whether people will find the video-recording-and-sharing aspect creepy. It might help a bit that people don't associate Snapchat as "instantly on the web forever" compared to other services. We'll see.
intrasight 10y ago
They don't have to spend it. Just having that warchest is of great consequence.
mathattack 10y ago
My 2 cents, with no inside information: 1) They're losing a ton of money. They barely have any revenue, and have over 1,000 employees, many of which are high paid engineers. They also have large technical overhead costs. My guess is they want to sock away 3-4 years of cash since they don't want to go back to the market too often. 2) M&A. Perhaps they buy some technology companies. Or Twitter? Or who knows? 3) They may be cashing out certain earlier investors. When companies IPO, they have to release a significant amount of equity no matter what.
- b2600 10y ago
  Snapchat buy Twitter!? They might need more than 4b$
  - mathattack 10y ago
    Not at the rate Twitter is headed downwards. :-) Also, it could be a combo of cash and equity.
- jocro 10y ago
  > They barely have any revenue At this second? Sure, but they're project for pretty explosive growth (~ $1 billion in 2017): https://www.emarketer.com/Article/Snapchat-Ad-Revenues-Reach-Nearly-1-Billion-Next-Year/1014437?ecid=NL1001 https://www.emarketer.com/Article/Snapchat-Ad-Revenues-Reach...

Building a war chest to purchase the next company or act quickly. You need to have the cash on hand, and that can't happen overnight. They need not spend the money today.

josho 10y ago
That's typically a bad reason to give to an investor.

CN7R 10y ago

Considering Snapchat revealed Spectacles, which in my mind was an unexpected hardware development, they could use funding for side projects and expansion. Hopefully, they don't become like Twitter and waste all that money for so little gain.

adamnemecek 10y ago
I'm pretty sure that they will write these off evetually. To me they feel very similar to Google glass insofar the customer bases being somewhat similar, maybe spectacles' being somewhat younger.
- CN7R 10y ago
  IMO, Google glasses were an obtrusive form of eyewear with limited AR capabilities—with a price tag of $1500. Spectacles are $130.
  - adamnemecek 10y ago
    You are right they are quite a bit cheaper but they are just as obtrusive. I think that glasses (esp. dioptric) are fundamentally a part of your identity and I think that most people fundamentally hate associating themselves with a company not to come across as a 'fanboys'. Like wearing the snapchat glasses projects a certain type of persona which I think most people might prefer not to project. I think that they should be marketed as "cool glasses (that also record video)" as opposed to "video recording glasses". "Video recording glasses" are a gimmick, "cool glasses (that also record video)" could be timeless.
    - nateburke 10y ago
      My initial impression upon seeing the spectacles was that they had two cameras. They don't, but the impression points to a key design choice that was, IMHO, fatally absent from Google glass: attempted symmetry. I think that people will be more likely to wear the spectacles for this reason--they can actually pass for a pair of somewhat ostentatious sunglasses to an unknowing observer because of their near-symmetry, vs. Google glass, the mere shape of which screamed "BORG!"
    - CN7R 10y ago
      Have you heard of Raybans? The merger of fashion and technology is possible, considering the existing fanboyism of some products and design of smart watches.
- tashoecraft 10y ago
  Google Glass and Spectacles are not even close to the same customer base. Google glass was a luxury beta product for techies with lots of disposable income. Spectacles are targeted towards 15-25yr olds. Google Glass users wanted to use the "future" of technology where as spectacles users want to Snap and share more. I'm surprised their hasn't been nearly the same adverse reaction to spectacles as there was to glass. Maybe we haven't seen it yet as they haven't been released, but people hated the potential of Google Glass sharing pictures and videos of people without them knowing. Maybe we've changed as a culture enough in these few years.
  - reneherse 10y ago
    Good observations. The difference with Spectacles is playfulness and fun: kids goofing off for the camera on a beach vs normcore cyborg narrating on a bluetooth headset. A potential weakness of Spectacles as a product is that it augments only non-selfie, "extraverted" photography. So it doesn't engage the selfie obsessed side of the userbase as much as the phone-based AR filters do. I haven't been a fan of Snapchat, but now I'm curious to see how users react to this product.
  - deleted 10y ago
    [deleted]
  - bogomipz 10y ago
    But do the majority of 15 - 25 Snapchat users have $130 to spend on these? I'm asking because I don't know. Also sunglasses seem to get forgotten/lost somewhat regularly no?
    - soundwave106 10y ago
      Designer sunglasses can easily cost more than $130 and some 15-25 year old people do find the money to spend on them. So the real question is more has Snapchat and its functionality built enough of a cachet to be valued as highly as something like a Ray Ban. I do wonder about whether people will find the video-recording-and-sharing aspect creepy. It might help a bit that people don't associate Snapchat as "instantly on the web forever" compared to other services. We'll see.

intrasight 10y ago

They don't have to spend it. Just having that warchest is of great consequence.

mathattack 10y ago

My 2 cents, with no inside information: 1) They're losing a ton of money. They barely have any revenue, and have over 1,000 employees, many of which are high paid engineers. They also have large technical overhead costs. My guess is they want to sock away 3-4 years of cash since they don't want to go back to the market too often. 2) M&A. Perhaps they buy some technology companies. Or Twitter? Or who knows? 3) They may be cashing out certain earlier investors. When companies IPO, they have to release a significant amount of equity no matter what.

b2600 10y ago
Snapchat buy Twitter!? They might need more than 4b$
- mathattack 10y ago
  Not at the rate Twitter is headed downwards. :-) Also, it could be a combo of cash and equity.
jocro 10y ago
> They barely have any revenue At this second? Sure, but they're project for pretty explosive growth (~ $1 billion in 2017): https://www.emarketer.com/Article/Snapchat-Ad-Revenues-Reach-Nearly-1-Billion-Next-Year/1014437?ecid=NL1001 https://www.emarketer.com/Article/Snapchat-Ad-Revenues-Reach...