Description: While some might have been shocked this week by the multi-billion dollar offers the start-up Snapchat turned down, I found something else entirely perplexing about the valuation of this little company: just how quickly it grew.
Date: Nov 15, 2013
The report said that teenagers once called Facebook the best social site on the Internet. Now they’re abandoning the service and flocking to Instagram and Twitter. Other reports have noted that in 2006, Pew Research found that 85 percent of teenagers online had a MySpace account. By 2013, only 7 percent maintained an account there.
Teenagers may be fickle, but big Internet companies still need to court them.
During Facebook’s latest earnings call, the company’s stock began dropping rapidly, losing almost 3 percent of its value, after Facebook’s chief financial officer, David Ebersman, said the number of daily users who are young teenagers had been slipping.
Questions for discussion:
1. Why did Facebook offer $3 billion to purchase Snapchat? Is that a fair price? Why or Why not?
2. Should Snapchat sell, why and at what price?