Snapchat and the Value of Self-Destructing Messages

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Nov. 15 (Bloomberg) -- Bloomberg Businessweek’s Felix Gillette explores the recent interest in the business of Snapchat and the company’s reported rejection of a $3 billion offer from Facebook. He speaks on Bloomberg Television’s “Market Makers.”

Facebook, instagram, whatever.

It basically allows you to send photos, and that was the original usage.

Send the photo to somebody, they look at it for 10 seconds, it disappears.

You don't have to worry about it coming back months later to haunt you.

Then what would people use snapchat for besides naughty pictures or selling drugs?

What do people take that they know they want deleted?

It evolved from the texting application to a fun way to talk to your friends.

If you start using it, it is like sending a text message to somebody except you can send a photo and sort of graffiti over it.

It is very 38 of, a fun way of talking to them.

In the same way you would not want all your phone calls recorded for history or all your instant messages recorded for history, the same thing with snapchat.

It allows you to be more free because there will not be a record of it.

Utah state inside with the founders.

What are they thinking yak -- you have stayed inside with the founders.

What are they thinking?

$3 billion?

I was with one of the cofounders and he did not strike me as a guy who has any interest in giving up control of his company.

It is just getting started, he is engaged with it.

He sees it as having a huge future, so why sell out now?

He will get a big payday down the road at some point.

Maybe not.

What does he think it is worth?

Clearly more than $3 billion.

There is so much desire for this type of thing within social media.

Facebook recently admitted on its earnings call that it is used -- it is losing a lot of its young users.

That is a dangerous thing for a social network.

That is what happened to myspa ce.

That is why facebook wants to purchase snapchat.

So in an environment like this, where twitter, which also does not make any money, and get in a value -- can get a valuation of $25 billion -- he can create a small fraction of equity for whatever cash he needs?

Yes, or maybe he will wait a couple of months and find another interested buyer.

He has good reason not to like mark zuckerberg.

Mark zuckerberg tried to buy snapchat previously, and when they said they are not interested, mark zuckerberg went back and tried to kill snapchat in its infancy by reit -- by releasing a copycat application.

This guy is a jerk -- why would i want to sell my baby to this guy who tried to kill us a year ago?

So it is not that he wants to sell it -- it is not that he doesn't want to sell it, he just does not want to sell it to mark zuckerberg.

I think that is it.

I think they are probably envisioning sort of in-app purchases where you can get the tools for free and pay extra for different filters, special effects.

For sextin unlimited.

This text has been automatically generated. It may not be 100% accurate.

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