Earlier in the week, it was revealed that Snapchat had rejected a $ 3 billion acquisition offer from Facebook. If the deal had succeeded, it would have been Facebook’s biggest purchase to date, much more than their latest $ 120 million takeover of Isreali app-maker, Onavo, earlier in the year.
Over 2005, Facebook has acquired just fewer than 40 companies, and though this is far short of Google’s rate of consumption (190+ companies in the past three years), it seems that the buck may have stopped at Snapchat. this is definitely worrying for Facebook. Not only because one of the most popular apps on the market have rejected being part of their enterprise, but because this is where a large portion of their audience is now heading.
According to GlobalWebIndex, who conducted a study on digital consumers in 32 markets, there has been a great decrease in Facebook’s daily users, especially amongst teenagers. The survey showed that the number of active teenage users had declined to 56% in the third quarter of 2013. In the first quarter, the figure stood far higher at 76%. Additionally, it was also able to show that tech savvy teens are instead turning to mobile chat services such as WeChat, Vine, Skype and WhatsApp:
“What is clear is that competition from other social media platforms is increasing, and as we can see users are adopting supplementary services that serve specific needs rather than switching to other platforms entirely. Mobile is a key driver of this change where built-in OS functions and applications make it very easy to use many different services, all of which focus on doing very specific tasks, e.g Snapchat or Whatsapp.”
Snapchat’s rejection therefore is a massive blow to Facebook, though it may be temporary. If Snapchat is holding out for another offer, they must believe that this offer is far greater than the one that they have just rejected. For the moment, Snapchat doesn’t need Facebook’s help. Moreover, if the company does hold out against the social media titan, this is good for everyone else, as it maintains a competitive market, helping to keep smaller companies in business and consequently adding greater value to their products. Facebook therefore must now compete with not only Snapchat, but also every other communication app that comes along, and for everyone else, this means that the world of social media can only get better.