In our article “Evolving your game plan”, from December 2013, Molewood Consulting reflected on the rejected $3 billion offer by Facebook, for the dissolvable social media platform – SnapChat. We asked, if the management’s rejection of a seemingly generous offer, would see Snapchat dissolving at the mercy of Zuckerberg’s gang finding another, more sinister way to deal with them. Again we ask whether part of the skills of building a brand and business, is being able to recognise when it has reached its full potential. Yahoo just bought Blink (Snapchat rival) – and judging from the message they put out, you could almost hear the Blink management pumping their fists and whooping with delight… They knew…
According to the article published in the Financial Times on 18th May, Facebook’s tank is now set to roll over the company that bravely / oddly rejected its advances.
Facebook will be going head to head with its Snapchat rival and whilst the vehicle most likely used to achieve this would have been a collaboration with Instagram, it now appears that its newly developed App – Slingshot is far more of a direct competitor for Snapchat to worry about (the clue was in the name). Spiegel and Murphy at Snapchat, must be seriously considering whether $3billion was in fact a good enough exit point for a 5-year-old company.
There are other products out there, which seem to operate in the same space- Wordeo, for example launched just 4 months ago, and allows a user to create a professional looking video, using library images, videos, sounds and music. We can all be Spielberg and Wordsworth – almost. Everyone who can load up and distribute entertaining content has a chance of achieving a $1 Billion plus price tag. If you build it – they will come (and buy you, and eat you up and absorb you into their offices). Airbnb, Twitter, Google, Yahoo and Facebook ideally.
At the rate of innovation and companies getting into the Social Media space, if Facebook’s strategy is to identify a threat and buy it, they need to have incredibly deep pockets – WhatsApp was $16billion, and that must have dented the war-chest… hopefully they have saved some bucks for KakaoTalk, WeChat and Line. All of these players in the “Entertainment Bursts” sector need to stay inventive in order to remain current with their user markets, but there is a diminishing usage for the mass update community sites, “Hey everyone, I’m having a sandwich…” style of announcements are reaching the point of diminishing enjoyment for the reader. The growth area still lies in the one on one communication – even more so, if they are useful and entertaining.