4 ms·

Dunno, I firmly believe that once you have that many users, you're sitting on a gold-mine just waiting to be exploited.

by d0m 13y ago

notahacker 13y ago
The evidence from companies that have that many users certainly points towards high revenues, but not revenues commensurate with a $3billion valuation. Facebook is a mature advertising platform with far more to offer advertisers than Snapchat is ever likely to, and earns revenues of less than $7 per active user per year. If Snapchat is as effective at monetising at Facebook, which sounds optimistic, it would take them 17 years to make $3billion in revenue off ~25million active users. I don't doubt that Snapchat's user base will continue to rise in the short term, but I also don't think it'll be around in 17 years... If you compare Snapchat not with the internet's leading repository of user metadata, and more with similarly popular locations for ephemeral meme-sharing amongst teenagers, its current user base more closely resembles that of the Cheezburger Network, whose decision to lay off a third of their workforce earlier this year hardly points towards stratospheric advertising revenues from their own ~25 million users
- wpietri 13y ago
  Exactly. If there's any lesson people should learn from Facebook, Instagram, and Snapchat, it's that these users are fickle. Valuations based on long-term growth and long-term exploitation of those users are somewhere between very speculative and outright fantasy.
bmelton 13y ago
I don't disagree, but to me, $3 billion dollars is indeed a gold-mine. I don't know what they're worth, what they will be worth, or whether or not it'll ever end up being super profitable. Apparently, the naysayers were wrong about Groupon, as they're now doing pretty well, and it seems that turning down the acquisition offer wasn't entirely stupid. That said, $3 billion dollars is a lot of money, and I would pretty much always take it, and move on to executing the next idea.

Dunno, I firmly believe that once you have that many users, you're sitting on a gold-mine just waiting to be exploited.

by d0m 13y ago

Dunno, I firmly believe that once you have that many users, you're sitting on a gold-mine just waiting to be exploited.

The evidence from companies that have that many users certainly points towards high revenues, but not revenues commensurate with a $3billion valuation. Facebook is a mature advertising platform with far more to offer advertisers than Snapchat is ever likely to, and earns revenues of less than $7 per active user per year. If Snapchat is as effective at monetising at Facebook, which sounds optimistic, it would take them 17 years to make $3billion in revenue off ~25million active users. I don't doubt that Snapchat's user base will continue to rise in the short term, but I also don't think it'll be around in 17 years... If you compare Snapchat not with the internet's leading repository of user metadata, and more with similarly popular locations for ephemeral meme-sharing amongst teenagers, its current user base more closely resembles that of the Cheezburger Network, whose decision to lay off a third of their workforce earlier this year hardly points towards stratospheric advertising revenues from their own ~25 million users

wpietri 13y ago
Exactly. If there's any lesson people should learn from Facebook, Instagram, and Snapchat, it's that these users are fickle. Valuations based on long-term growth and long-term exploitation of those users are somewhere between very speculative and outright fantasy.

bmelton 13y ago

I don't disagree, but to me, $3 billion dollars is indeed a gold-mine. I don't know what they're worth, what they will be worth, or whether or not it'll ever end up being super profitable. Apparently, the naysayers were wrong about Groupon, as they're now doing pretty well, and it seems that turning down the acquisition offer wasn't entirely stupid. That said, $3 billion dollars is a lot of money, and I would pretty much always take it, and move on to executing the next idea.