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China’s Alibaba Group may invest in Snapchat: reports

01 Aug 2014

1

Snapchat Inc is in talks with Chinese e-commerce giant Alibaba Group Holdings Ltd over a possible investment in the mobile-messaging start-up, which could value Snapchat at around $10 billion

But whether the discussions would lead to a deal, was not clear, Bloomberg repoted.

Snapchat's popularity, has soared among teens, following the initial app release in September of 2011.

Created by Stanford University students, the app allows the sending of text and photo messages that disappear seconds after viewing. In addition to its rejection of a buy-out offer from social network giant Facebook Inc, Snapchat had also been approached by other investors and would-be buyers, including a group led by Chinese internet giant Tencent Holdings Ltd, which estimated its value at $4 billion.

Alibaba, which had been preparing its initial public offering on the New York Stock Exchange in September, had in recent months made a number of investments across diverse companies from entertainment company ChinaVision Media to Singapore Post, the main postal operator in Singapore, and in Youku Toudu, a sort of Chinese ''YouTube.''

In the event of a deal, it would represent a big bet on the future of Snapchat, the pioneer of disappearing messaging applications. Self-destructing photos and messages had taken Silicon Valley by storm, attracting the attention of tech giants like Google Yahoo and Facebook, The New York Times reported.

However, it was Snapchat's captive audience that was the most enticing part to these internet giants. The company's core user demographic is age 13 to 25, with 70 per cent of that group being women, Spiegel had said.

Facebook, particularly had tried but failed to replicate the popularity of Snapchat's ephemeral photo sharing service. The company introduced a similar mobile app, Poke, which failed to find support among users. Earlier this week, Facebook-owned Instagram, rolled out its own separate photo-messaging app in a handful of countries.

Snapchat so far has a clear lead. The company, however, does not share user numbers, the application had been the top 25 most downloaded apps in the Apple App Store in the US for the past year, according to mobile analytics company App Annie.

Snapchat users, as of last Novemeber had sent one another over 700 million ''snaps,'' or disappearing photo and video messages, on a daily basis, according to the company.

According to commentators, what the company did not yet have were robust revenues, as it focused on attracting more users to its service.

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