Why Snapchat Denied Facebook's $3 Billion Offer

I just finished reading two articles, one named "Why Snapchat is Screwed" (by Shane Snow, CCO of Contently) and one named "Why Snapchat Isn't Screwed" (by Azeem A, PeerIndex). From the title of these articles, we see a deep lack of understanding revolving around why Snapchat, a photo-messaging app developed by Stanford students, would turn down $3 billion buy-out from Facebook.

According to Snow, "The fact remains: Snapchat itself doesn't make money. Facebook bid the $3b on it in order to eliminate the threat of a future competitor, not because it's a promising revenue source." Would Facebook spend $3 billion to buy out a threat of a future competitor? Perhaps, but I would argue that there is much more at stake. Snow argues, "I think they're screwed. Snapchat, I predict, will be the next Formspring or Chatroulette, that mega-hot thing that all the kids were on until suddenly they weren't."

What people, and by people, I mean business people, do not understand about Snapchat is that a product like Snapchat is more than a "product" - it is a unique idea that has significantly gained traction in today's youth (and increasingly older) market. Snapchat is not just a "mega-hot thing" (sorry, Snow). The problem with so many of the articles surrounding Snapchat is that they are written by people who are obviously non-users of the product. They don't understand how - at it's core - Snapchat is a significantly different application from Formspring or Chatroulette. They don't understand why Snapchat, like Myspace, Facebook, Instagram, Vine, and it's predecessors, have gained social media lives that will endure much farther than their "mega-hot" colleagues. And how important and valuable this market traction makes this application.

Azeem (Why Snapchat Isn't Screwed) seems to be on the right track, but he underestimates the idealism that Snapchat and it's founders, Evan Spegiel and Bobby Murphey, represent. These are founders who named their app mascot "Ghost Chillah" after the Wu-Tang Clan's "Ghostface Killah." Azeem contends that Snapchat could use branded stickers, branded content, targeted advertising, a premium version, or even a gaming platform to generate revenue and eventually find a "decent, sustainable way to make money." Snapchat, however, isn't worried about making money - their ranking in the App store and their prevailing intimacy with their users proves Snapchat's value, just as Instagram before them. Snapchat has something that 95% of applications do not have - a consistent, connected audience of users that value the app and use it daily. In today's world, it is hard to put a price on that kind of engagement. 

Snapchat turned down Facebook because it was the wrong company to buy them. As Spegiel said in an interview with Forbes magazine (mainly discussing Facebook), "People are living with this massive burden of managing a digital version of themselves. It's taken the fun out of communicating." The value of Snapchat lies opposite of Facebook - it is spontaneous, frivolous, spur-of-the-moment, and it is ephemeral. Your Snapchat photos will not reach your next potential employer, and unlike Instagram, your photos will not show up in a Google search of your name. Snapchat's Evan Spegiel and Snapchat users understand this more than anyone else - so please, if you are not avid users, stop writing articles about Snapchat's profitability - no one cares. 

A Commercial that Will Make You Cry - Google Reunion Video

This video will make you cry. I promise. Have you ever thought a commercial could make you cry?

Take my advice: As you watch this video, don't think of it as a commercial. Enjoy it as a what it is: 3:32 minutes of amazing content, footage, and a heartwarming story of two friends.

Feeling misty-eyed, or a lump in your throat? You're not alone. Thousands of people watching this video are ending up in tears - just look at the YouTube content.

What makes this video so effective? What makes Google's story so much more effective than the hundreds of efforts before it? Take for example, Apple's 2013 campaign for Facetime. It seems to have all the right components: relatable people of all cultures, heartwarming music, cute children, dogs, and stories.

What went wrong? Why do you feel like exiting the video at 0:22? Apple's commercial doesn't draw you in, there are no main characters, no plot, no reason to keep watching. Basically - Apple doesn't tell you a whole story. 

Consider P&G Swiffer's "old couple" commercial. Like Google's Reunion, it is 3:18 minutes. But like Apple's Facetime, you will probably want to leave within the first seconds. 

This commercial may make you chuckle, especially if you watch the shorter version. But I doubt you will watch the entire three minutes. You might think it's cute, and remember it for about a year. But the video makes some key mistakes; while there are main characters, there is no plot, no conflict, no resolution. Again, no reason to keep watching. P&G's product placement is also not as a integrated and subtle as Google - in Google's ad, you saw the characters use Google for location services, word definitions, business listings, airline flight status, and a weather forecast - and I bet that you didn't even notice at least two of those product placements. 

Is this the future of commercials? Perhaps. It is certainly great for Google's brand... A giant international corporation that computes algorithms, collects data and information suddenly has a human face and story. But if you're going to go the Google route for advertising, make sure you do it right.