Why is SnapChat so important (that they can reject $3 billion buyout from Facebook?)

The purpose of Snap-Chat is kind of sinister. It is being used to send embarrassing photos of your friends and the unsuspecting victim does not get a chance to take down the picture like he/she might be able to do on Facebook. Plus the auto deletion feature makes it a perfect way of communicating covertly as Snap-Chat claims that it permanently deletes the photo from its servers once the user activates the self destruct feature. There are few apps in the Google Play Store which enable you to save the images from Snap-Chat and Snap-Chat even admits that users will be able to use the screenshot feature on their smartphones to grab a copy.

Statement from SnapChat goes like this:

Please note: even though snaps are are deleted from our servers after they are viewed, we cannot prevent the recipient(s) from capturing and saving the message by taking a screenshot or using an image capture device.

The reason why Snap-Chat is worth a lot of money is because of its simplicity. Teenagers love it because their parents and relatives haven’t yet “discovered it” and plus the images are only shared among the desired list of contacts and not a whole group. Plus while you might have to deal with trolls on Facebook and Twitter but SnapChat does not encourage trolling.

It seems like SnapChat is waiting for a buyer which purchases them with a ridiculous amount of money but still gives them autonomy of the app policy.

Why is someone buying this app? what is the purpose of this? I think the hype it is creating is useless and i am really not interested in using these kinds of tools.

Why do you want to send awkward photos to friends? and to achieve what?

I think we are heading into a world where nothing is secure.

Companies like SnapChat, Twitter, Linkedin, etc. are only popular as long as they're free. They're only free as long as the owners are losing money providing the service. Even facebook is eventually going to go broke. The valuations on these companies are insane and do not reflect the fundamentals (which is some case show the companies are worthless). If we even take Facebook which is managing to earn a profit, it's P/E is still nearly 100! This is even while facebook is losing it's human user base. Twitter has never earned a profit, Linkedin is temporarily earning a profit while some larger recruiting firms try out their system even though none have seen a positive return on the investment so far. Linkedin has a P/E of 227! These are the type of valuations we'd see during the dotcom bubble when people were investing billions in doorknobs.com and other ridiculous companies.

The problem with these services like facebook, instagram, and linkedin, is that anyone can copy it, and hundreds have, you just most likely haven't seen it because they didn't get that critical mass of users first. But once the fad fades, or they start to charge a fee, or they clutter the site with ads, everyone flocks to one of their competitors that's willing to do it for free hoping they can also sucker a large number of investors to foolishly buy their product more based on name recognition and hype rather than financial viability. Eventually investors are going to wise up to this. If google buys SnapChat they'll lose billions doing so and their investors are not going to be happy about it. Right now the hype is making people delirious. But that's $4 billion that google could use to pay a dividend, but it will use to buy a company that will it then try to monetize and find that the users flock to the next service doing the exact same thing.