Google has reportedly looked into buying Snapchat for as much as $30b.
Snap’s current market capitalization is around $16b.
The target. Google wants to attack the $72b television ad market and adding Snapchat would provide a more compelling offering.
Interesting comparison. Adding Snapchat’s younger audience would be comparable to owning both MTV and ESPN at the peak of cable TV.
Snapchat has been getting its fair share of bad press lately with its earnings and stock price.
Facebook went through similar challenges following its IPO when it lost 50% of its value within 4 months of going public.
Public services announcement from SOTS. Facebook now has a market cap of $485b making it one of the most valuable companies in the world.
A big question is which publicly traded company should we benchmark them against? Are they more like Facebook? Twitter? Netflix?
The correct answer may be none of the above in light of recent announcements with NBC News and ABC News.
Snapchat is working with networks like NBC, ESPN, Turner and A&E on “Snapchat Shows,” which are 3–5 minutes in length.
Revenue will be generated through advertising and split 50–50 with the content creator.
Each episode will contain three 10-second ads.
How does this ad load compare to TV?
1) Snapchat — 3 minutes of content + 30 seconds of ads → 14% of time w/ ads
2) Television — 44 minutes of content + 16 minutes of ads → 26% of time w/ ads
Every hour of video viewing on Snapchat will deliver less than 9 minutes of ads or 53% of the ad load of television.
Content from premium partners combined with original shows (Good Luck America, etc.) could provide Snapchat with a competitive enough offering to claim more screen time.
1) Good Luck America — 5.2m viewers per episode
2) E! News: The Rundown — 7m viewers per episode
NBC News has also signed up to produce the first daily news show for Snapchat.