Snapchat – not a useless app after all?

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                                           (photo credit: Yahoo! Tech)

We have spent multiple minutes of our class time discussing Snapchat’s value. How can a company with a business that relies on sending quickly disappearing messages create value for its investors? There are two major ways an app can make money: via ads or via subscription fees. Will you pay $2/month to use Snapchat? Well, I thought so… But wait, here is a semi-spam message that landed in my inbox yesterday. I usually ignore 99.999% of such emails, but the title caught my attention:

“How to Use Snapchat’s New Instant Messaging and Video Features”

Video? IM? Delivered in a seamless fashion? Read on:

“This is great news for power users. Anyone who spends enough time communicating with friends on the app knows that switching to another avenue for some good, old-fashioned texting is a chore. Say you send a snap to an old college roommate, and it sparks some nostalgic image-swapping. There’s no need to switch to iMessage to continue that conversation or to schedule a Skype date. The app allows for the kind of spontaneous conversation that feels natural, a point that Snapchat CEO Evan Spiegel drove home in an interview with The New York Times. “If I’m walking around and want to show you something, why do I have to switch apps?” he said. “It stops the conversation and makes it a transaction, rather than free-flowing.”

Snapchat suddenly becomes more interesting…

 

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