Google's failure to find a space in the social media niche has been well documented and a new report claims that the company had tried to buy Snapchat for a staggering $30 billion last year. Snapchat got the offer from Google at around the same time they had their IPO and plenty of people inside the organization were aware of the offer that had been made. The scoop first surfaced on Business Insider.
An opportunity lost?
When Google made the offer last year, Snapchat was flying as an organization as they were on the verge of securing another round of funding and were on course for their much-publicized IPO.
Snapchat's charismatic CEO Evan Spiegel obviously believed that the company could be worth far more than Google's $30 billion offer and was proven right in May last year when the value of the company rose to $30 billion following the IPO.
However, it has not quite panned as a story of Steady Growth and over the past few months, Snap's stock has gone off a cliff. The company is currently valued at $15 billion and in retrospect, Google's offer definitely looks like a lost opportunity for Snap's shareholders. The news of Google's interest in the company, however, helped in propping up the price of its stock yesterday.
Snap denied approach
Following the publication of the story, Google refused to state anything regarding the offer while Snapchat dismissed the whole thing and stated that those were nothing more than false rumors.
However, it is interesting to note that Google's failure to acquire Snapchat did not deter them from investing in the company. Google's investment fund CapitalG made an investment in the company in November last year and took the valuation of Snapchat to $20 billion. It is also important to note that Snapchat and Google are not hostile towards each other as companies at all and in fact, their CEOs share an excellent rapport, according to Tech journalists.
Snapchat looked like the clear winner in their line of business but the growth of Instagram has proved to be a problem for the company as more and more advertisers quietly moved to the latter platform. Growth has not been the same over the recent months either and the company faces an uphill struggle in order to recapture their former glories.
However, a takeover by Google could prove to be a masterstroke in the current circumstances. The cash injection will help the company in trying out a range of new features that will be crucial in their competition with Facebook owned Instagram. In addition to that, it will bring Snapchat under the umbrella of a company that can stand up to the might of Facebook for a long time.
