7 ms·

Yahoo Close to Investing in Snapchat at $10B Value

28 points by coreymgilmore 12y ago

Cuuugi 12y ago
Between Tinder and now Snapchat, it makes me think Yahoo is building a p0rn empire.
- deleted 12y ago
  [deleted]
  - rch 12y ago
    (Parent was a comment about Tumblr's risque content continuing a theme in Yahoo investments, but without supporting stats.) "According to an analysis of Tumblr’s 200,000 most-visited domains, 22,775 of them are adult – or 11.4 percent." http://techcrunch.com/2013/05/20/tumblrs-adult-fare-accounts-for-11-4-of-sites-top-200k-domains-tumblrs-adult-fare-accounts-for-11-4-of-sites-top-200k-domains-adults-sites-are-leading-category-of-referrals/ http://techcrunch.com/2013/05/20/tumblrs-adult-fare-accounts...
- deleted 12y ago
  [deleted]
  - mliker 12y ago
    Yes, because of some NSFW content on Tumblr, we can safely say Yahoo is building a porn empire...</sarcasm>
- mliker 12y ago
  I think that's a bit ridiculous to say. Based on that comment, it sounds like you've never used Tinder or Snapchat. There are many users on Tinder who are looking for relationships, and users of Snapchat like to share their moments with each other without having to save the bad quality photos on their phone.
- pkfrank 12y ago
  Has Yahoo invested in Tinder? Can't find mention of it anywhere.
  - deleted 12y ago
    [deleted]
  - dublinben 12y ago
    They probably meant to write Tumblr, which Yahoo does own.
- alex_doom 12y ago
  I thought Match.com owns Tinder now?
- cdibona 12y ago
  By that logic, I'd say that we could look at the reddit investment as a pornography investment, too.
comatose_kid 12y ago
It's not clear how much Yahoo is investing at that valuation, but I hope that the stated reason of re-creating an Alibaba type investment is not the primary driver. Despite the success of Alibaba, a single data point is not a trend (even a spectacular one like Alibaba), and I'm not sure that Yahoo's core competency is/should be picking winners.
- deleted 12y ago
  [deleted]
- orky56 12y ago
  I fear that Yahoo has little faith in its long-term vision and is placing it in another company. Although there is nothing wrong with this action directly, it does show that their capital is more useful somewhere else rather than within their own company for a similar vertical.
- minimax 12y ago
  Other reports have said it's in the ballpark of $20M. http://online.wsj.com/articles/yahoo-nears-investment-in-snapchat-1412361684 http://online.wsj.com/articles/yahoo-nears-investment-in-sna...
  - ojbyrne 12y ago
    Which is peanuts to Yahoo. This basically seems like they're trying to emulate Google Ventures without the full commitment of creating an organization like that. Seems smart.
giarc 12y ago
Snapchat must be huge in the teen/young adult demographic to justify this valuation as I don't see many adults using this app anymore. Although this is a fairly localized/anecdotal opinion of the app, perhaps in other regions, Snapchat is big among many demographic categories.
- NewHermes 12y ago
  I am a 23 year old at a large state school and I can tell you that snapchat is definitely the most popular social media app on campus. It has completely replaced texting for a lot of my peers and in my opinion is best way to flirt electronically. Twitter and instagram are tied for second, with Facebook coming in last. For what its worth, meeting someone who isn't on snapchat is unheard of, but I haven't added anyone on facebook since the fall term began. Yik Yak is also on the rise but it's anonymous nature limits connections, and in turn growth.
  - wahsd 12y ago
    I feel like Facebook is flaming out. Do you get that sense too?
    - cobookman 12y ago
      Yes. I used to think that facebook would still keep getting life events/friend checkups. But my friends have slowly been moving that to snapchat. Just get married, snapchat that wedding ring (then post to facebook later a status update). I still use facebook for events/groups. But I can see someone stealing that away from them.
      - NewHermes 12y ago
        I think Facebook is becoming a virtual contact list and birthday reminder, with status updates and pictures acting like mini holiday cards for events that are noteworthy but not significant enough to actually send out a card for(getting into grad school/new job). Pretty much everyone is on Facebook under their real name, and it is the only social media platform where that is the case. The management consultant in me has a feeling that data is going to be worth a lot of money. Google might know a lot about my interests but Facebook has my real name, real school, real job, as well as my interests.
mililani 12y ago
Reading things like this kinda depresses me. I guess I just don't understand what makes things popular on the web. I mean, I would have never thought things like Twitter, Instagram, all of the various messaging apps would ever get this much traction. I think it's bizarre.
- mmxiii 12y ago
  The mistake here is that you are conflating your subjective preference with reality. You are implicitly evaluating something against your own context, but to understand why twitter,etc are successful, you need to ask questions about what OTHER people value, and why they do it.
  - gaius 12y ago
    You say that, but it is the same as the dotcom days, everyone thought it was a "new economy", yadda yadda. Right now, ALL these investments are highly speculative. Any of these companies could do a MySpace overnight.
    - ulfw 12y ago
      Very much agreed. But think about it - even Myspace was only sold for a little over half a billion. We are orders of magnitude higher now. Holy bubble!
  - enraged_camel 12y ago
    It's worth noting that most popular web apps today started out as related but different ideas, and it wasn't always a result of some clear-cut vision. Twitter for example was a group SMS service and there was a lot of uncertainty about its actual purpose and utility, even among the founding team: >>"With Twitter, it wasn't clear what it was. They called it a social network, they called it microblogging, but it was hard to define, because it didn't replace anything. There was this path of discovery with something like that, where over time you figure out what it is. Twitter actually changed from what we thought it was in the beginning, which we described as status updates and a social utility. It is that, in part, but the insight we eventually came to was Twitter was really more of an information network than it is a social network." -Evan Williams http://en.wikipedia.org/wiki/Twitter#History http://en.wikipedia.org/wiki/Twitter#History
patrickmay 12y ago
The investment will, however, disappear after being deposited.
azinman2 12y ago
Amazing for a company that is primarily about a user base they can't charge for, or data mine for advertising.
moe 12y ago
And snapchat plans to make money how? Plus, at least in europe kik and viber seem a lot more popular than snapchat. And it would take them about an afternoon to add a "self destruct" checkbox to their image and video dialogs... I can understand yahoo desperately wanting to get a foot down "with the cool kids". But 10 billion, seriously?
- jqueryin 12y ago
  Shared revenue of sponsored story promotions/snaps would be one way. Think of this: Create a marketplace around big businesses getting viral content producers to push their products subtly (Truman Show anyone?). Snapchat, acting as the intermediary and service provider, can collect a percentage of the promotional gig in return for facilitating the transaction and acting as an escrow service or middleman. It's not so different from television ads now, just a broader market with lots more content producers that have large fanbases across demographics TV just doesn't have.
- untog 12y ago
  Snapchat already has "promoted snaps" of a kind, I suspect they'd just continue down that path.
curiously 12y ago
How do you monetize a large user base without credit cards? How would they get teens to get their parents to pay for the ability to send nude pics to their friends? Meanwhile, millions of small businesses paying $10 a month for secure document shredding with years of increasing profit remains large ignored by the media, nobody bats an eye. Nobody puts an insane valuation on it because it's not cool. So business is no longer about positive net cash flows but spending it. Whoever spends money in the coolest way is the winner as long as you got investors who suddenly forgot what happened the last time we were in the new and hip economy.
- aaronbrethorst 12y ago
  I would be insanely grateful to fly under the radar like that, were I the owner of a business that had millions of paying customers. Let the media crow about Snapchat all they want, and dry your tears on hundred dollar bills.
- austinhutch 12y ago
  The majority of ad $ spend has been in TV. It's not because there was a credit card reader on each TV, but because there was not a better way to get that kind of wide exposure. There is tons of money transitioning from TV to other areas.
- spigoon 12y ago
  How do you monetize a large user base without credit cards? Ask Facebook. With Snapchat's curated "Our Story" stream it would be easy for them to superimpose a brand's logo on top of snaps that would get viewed by an audience that fits a particular demographic. I'd wager that companies see value in that.
  - increment_i 12y ago
    I'd agree with that. You have to have a market's attention before the sell -- whatever that may be -- and Snapchat has that right now. I think this particularly applies to younger markets. For example, when I was a kid cartoons were basically 30 minute advertisements for toys and games. And you had better believe I let my parents know those toys were must haves. Snapchat might be in the best position to be that platform for the teenage market, a new MTV if you will.
trhway 12y ago
>Users send more than 700 million disappearing “snaps” a day and more than 500 million stories viewed daily well, in Internet dollars - $100/user of FB and the likes - 70M users is $7B scale. 500M exposures point to the same ballpark - the ballpark where it doesn't really matter whether it is $5B or $10B valuation. Even 10 fold growth would bring Yahoo only $200M - peanuts, and obviously Yahoo makes that investment not for money, it is just a cover fee for entry into the club.

28 points by coreymgilmore 12y ago

Cuuugi 12y ago

Between Tinder and now Snapchat, it makes me think Yahoo is building a p0rn empire.

deleted 12y ago
[deleted]
- rch 12y ago
  (Parent was a comment about Tumblr's risque content continuing a theme in Yahoo investments, but without supporting stats.) "According to an analysis of Tumblr’s 200,000 most-visited domains, 22,775 of them are adult – or 11.4 percent." http://techcrunch.com/2013/05/20/tumblrs-adult-fare-accounts-for-11-4-of-sites-top-200k-domains-tumblrs-adult-fare-accounts-for-11-4-of-sites-top-200k-domains-adults-sites-are-leading-category-of-referrals/ http://techcrunch.com/2013/05/20/tumblrs-adult-fare-accounts...
deleted 12y ago
[deleted]
- mliker 12y ago
  Yes, because of some NSFW content on Tumblr, we can safely say Yahoo is building a porn empire...</sarcasm>
mliker 12y ago
I think that's a bit ridiculous to say. Based on that comment, it sounds like you've never used Tinder or Snapchat. There are many users on Tinder who are looking for relationships, and users of Snapchat like to share their moments with each other without having to save the bad quality photos on their phone.
pkfrank 12y ago
Has Yahoo invested in Tinder? Can't find mention of it anywhere.
- deleted 12y ago
  [deleted]
- dublinben 12y ago
  They probably meant to write Tumblr, which Yahoo does own.
alex_doom 12y ago
I thought Match.com owns Tinder now?
cdibona 12y ago
By that logic, I'd say that we could look at the reddit investment as a pornography investment, too.

comatose_kid 12y ago

It's not clear how much Yahoo is investing at that valuation, but I hope that the stated reason of re-creating an Alibaba type investment is not the primary driver. Despite the success of Alibaba, a single data point is not a trend (even a spectacular one like Alibaba), and I'm not sure that Yahoo's core competency is/should be picking winners.

deleted 12y ago
[deleted]
orky56 12y ago
I fear that Yahoo has little faith in its long-term vision and is placing it in another company. Although there is nothing wrong with this action directly, it does show that their capital is more useful somewhere else rather than within their own company for a similar vertical.
minimax 12y ago
Other reports have said it's in the ballpark of $20M. http://online.wsj.com/articles/yahoo-nears-investment-in-snapchat-1412361684 http://online.wsj.com/articles/yahoo-nears-investment-in-sna...
- ojbyrne 12y ago
  Which is peanuts to Yahoo. This basically seems like they're trying to emulate Google Ventures without the full commitment of creating an organization like that. Seems smart.

giarc 12y ago

Snapchat must be huge in the teen/young adult demographic to justify this valuation as I don't see many adults using this app anymore. Although this is a fairly localized/anecdotal opinion of the app, perhaps in other regions, Snapchat is big among many demographic categories.

NewHermes 12y ago
I am a 23 year old at a large state school and I can tell you that snapchat is definitely the most popular social media app on campus. It has completely replaced texting for a lot of my peers and in my opinion is best way to flirt electronically. Twitter and instagram are tied for second, with Facebook coming in last. For what its worth, meeting someone who isn't on snapchat is unheard of, but I haven't added anyone on facebook since the fall term began. Yik Yak is also on the rise but it's anonymous nature limits connections, and in turn growth.
- wahsd 12y ago
  I feel like Facebook is flaming out. Do you get that sense too?
  - cobookman 12y ago
    Yes. I used to think that facebook would still keep getting life events/friend checkups. But my friends have slowly been moving that to snapchat. Just get married, snapchat that wedding ring (then post to facebook later a status update). I still use facebook for events/groups. But I can see someone stealing that away from them.
    - NewHermes 12y ago
      I think Facebook is becoming a virtual contact list and birthday reminder, with status updates and pictures acting like mini holiday cards for events that are noteworthy but not significant enough to actually send out a card for(getting into grad school/new job). Pretty much everyone is on Facebook under their real name, and it is the only social media platform where that is the case. The management consultant in me has a feeling that data is going to be worth a lot of money. Google might know a lot about my interests but Facebook has my real name, real school, real job, as well as my interests.

mililani 12y ago

Reading things like this kinda depresses me. I guess I just don't understand what makes things popular on the web. I mean, I would have never thought things like Twitter, Instagram, all of the various messaging apps would ever get this much traction. I think it's bizarre.

mmxiii 12y ago
The mistake here is that you are conflating your subjective preference with reality. You are implicitly evaluating something against your own context, but to understand why twitter,etc are successful, you need to ask questions about what OTHER people value, and why they do it.
- gaius 12y ago
  You say that, but it is the same as the dotcom days, everyone thought it was a "new economy", yadda yadda. Right now, ALL these investments are highly speculative. Any of these companies could do a MySpace overnight.
  - ulfw 12y ago
    Very much agreed. But think about it - even Myspace was only sold for a little over half a billion. We are orders of magnitude higher now. Holy bubble!
- enraged_camel 12y ago
  It's worth noting that most popular web apps today started out as related but different ideas, and it wasn't always a result of some clear-cut vision. Twitter for example was a group SMS service and there was a lot of uncertainty about its actual purpose and utility, even among the founding team: >>"With Twitter, it wasn't clear what it was. They called it a social network, they called it microblogging, but it was hard to define, because it didn't replace anything. There was this path of discovery with something like that, where over time you figure out what it is. Twitter actually changed from what we thought it was in the beginning, which we described as status updates and a social utility. It is that, in part, but the insight we eventually came to was Twitter was really more of an information network than it is a social network." -Evan Williams http://en.wikipedia.org/wiki/Twitter#History http://en.wikipedia.org/wiki/Twitter#History

patrickmay 12y ago

The investment will, however, disappear after being deposited.

azinman2 12y ago

Amazing for a company that is primarily about a user base they can't charge for, or data mine for advertising.

moe 12y ago

And snapchat plans to make money how? Plus, at least in europe kik and viber seem a lot more popular than snapchat. And it would take them about an afternoon to add a "self destruct" checkbox to their image and video dialogs... I can understand yahoo desperately wanting to get a foot down "with the cool kids". But 10 billion, seriously?

jqueryin 12y ago
Shared revenue of sponsored story promotions/snaps would be one way. Think of this: Create a marketplace around big businesses getting viral content producers to push their products subtly (Truman Show anyone?). Snapchat, acting as the intermediary and service provider, can collect a percentage of the promotional gig in return for facilitating the transaction and acting as an escrow service or middleman. It's not so different from television ads now, just a broader market with lots more content producers that have large fanbases across demographics TV just doesn't have.
untog 12y ago
Snapchat already has "promoted snaps" of a kind, I suspect they'd just continue down that path.

curiously 12y ago

How do you monetize a large user base without credit cards? How would they get teens to get their parents to pay for the ability to send nude pics to their friends? Meanwhile, millions of small businesses paying $10 a month for secure document shredding with years of increasing profit remains large ignored by the media, nobody bats an eye. Nobody puts an insane valuation on it because it's not cool. So business is no longer about positive net cash flows but spending it. Whoever spends money in the coolest way is the winner as long as you got investors who suddenly forgot what happened the last time we were in the new and hip economy.

aaronbrethorst 12y ago
I would be insanely grateful to fly under the radar like that, were I the owner of a business that had millions of paying customers. Let the media crow about Snapchat all they want, and dry your tears on hundred dollar bills.
austinhutch 12y ago
The majority of ad $ spend has been in TV. It's not because there was a credit card reader on each TV, but because there was not a better way to get that kind of wide exposure. There is tons of money transitioning from TV to other areas.
spigoon 12y ago
How do you monetize a large user base without credit cards? Ask Facebook. With Snapchat's curated "Our Story" stream it would be easy for them to superimpose a brand's logo on top of snaps that would get viewed by an audience that fits a particular demographic. I'd wager that companies see value in that.
- increment_i 12y ago
  I'd agree with that. You have to have a market's attention before the sell -- whatever that may be -- and Snapchat has that right now. I think this particularly applies to younger markets. For example, when I was a kid cartoons were basically 30 minute advertisements for toys and games. And you had better believe I let my parents know those toys were must haves. Snapchat might be in the best position to be that platform for the teenage market, a new MTV if you will.

trhway 12y ago

>Users send more than 700 million disappearing “snaps” a day and more than 500 million stories viewed daily well, in Internet dollars - $100/user of FB and the likes - 70M users is $7B scale. 500M exposures point to the same ballpark - the ballpark where it doesn't really matter whether it is $5B or $10B valuation. Even 10 fold growth would bring Yahoo only $200M - peanuts, and obviously Yahoo makes that investment not for money, it is just a cover fee for entry into the club.