Things never fail to get interesting with Snapchat, as it is now revealed that Alphabet Inc.’s Google attempted to acquire Snapchat for an incredible $30 Billion! No one would imagine Google and Snapchat to be in the news together.
Google and Snapchat have very different track records with social media and competition with Facebook, wherein Google has tried multiple times to float a social media platform of their own, yet with no success. Snapchat, on the other hand, has still maintained relevance and refused to be bogged down by Facebook’s jabs and cheap shots.
This particular offer from Google was made during early 2016, as reported by Alex Heath from Business Insider, before Snapchat’s record IPO and the eventual slump that hit their worst low yesterday. As their biggest rival and clone, Instagram Stories turned one, with monumental success in the form of 250 million plus users and an effortless monetization model.
Alex Heath even reports that Google and Snapchat have held multiple informal talks with one another in the past. “The initial $30+ billion offer would have been discussed just before Snap went on to raise its Series F round of private funding in May 2016, valuing the company at $20 billion.” Heath writes.
One would expect things would have changed when Instagram announced the arrival of Instagram Stories and how it cloned Snapchat’s features, one after the other, and ate away any hopes of user base expansion that Snapchat may have held.
Reports also suggest that in the now distant past, Google had also floated an offer of roughly $4 Billion after Evan Spiegel turned down Facebook’s Mark Zuckerberg’s offer.
Snapchat is one of the biggest consumers of Google Cloud, and Google’s Eric Schmidt is also said to be a close advisor and confidante of Snap CEO, Evan Spiegel.
Although, the reason this deal may not have materialized is due to Spiegel’s independent nature as Josh Constine from TechCrunch writes, “But Spiegel is the real stumbling block. He and his co-founder Bobby Murphy have configured Snap’s voting rights to give them full control over the direction of the company, denying public backers any say. So even if investors would love to take the $30 billion offer that’s double Snap’s current market cap, they couldn’t compel it to do so. Spiegel famously rebuked Mark Zuckerberg’s offers to buy Snapchat, and is known for following his gut over outside advice.”
Spiegel could be termed stubborn, or be termed a part of the rare breed of Founders who want to run their own company on their own terms, rather than be acquired and take a backseat.
To get a feel of how that works, I strongly suggest you watch Silicon Valley. Tell us your thoughts about the Google and Snapchat story in the comments, or write to us at [email protected]