YAHOO IN TALKS TO INVEST IN SNAPCHAT

Bloomberg, The New York Times and The Wall Street Journal are all reporting that Yahoo! Inc is set to invest in the online messaging application Snapchat. 

The investment will be Sunnyvale companies first major investment after an influx of capital from the Hangzhou-based Alibaba Group. According to The Wall Street Journal, the investment will value the Los Angeles based...

Snapchat at approximately $10 billion dollars.

Yahoo hopes that its investment in Snapchat will be a repeat of its investment into the Hangzhou-based Alibaba Group, an investment which had paid off and returned multiple times Yahoo’s initial investment of $1 billion. Yahoo paid $1 billion dollars for a 40% share in Alibaba in 2005, a move that has helped CEO Marissa Mayer stave off time with shareholders as she attempts to rebound Yahoo’s dwindling search engine market share, which has continued to lose market share to online mega giant Google and Microsoft’s Bing, which celebrates its fifth anniversary this year.

Snapchat was launched in 2011 by Evan Spiegel, Reggie Brown and Bobby Murphy while they were Stanford university students and has grown to become one of the most successful internet messaging applications on the planet with over 700 million photos being sent per day. Snapchat’s key feature is the automatic self-destructing of messages after a small window (usually 1-10 seconds). 

Yahoo has been in talks with Snapchat since the summer, according to the New York Times and has also purchased the San Francisco based start up MessageMe. According to reports by TechCrunch, Yahoo has purchased the San Francisco start up to build Yahoo’s own instant messaging service, dubbed Yahoo! Instant.

Snapchat has raised more than $160 million dollars in venture capital and has turned down multiple offers of investment, including a $3 billion dollar deal by the social media giant Facebook Inc in favor of stronger offers. The company has also been extensively looking at ways to distribute content and has worked with musicians and bands to distribute ‘snaps” to their audience.

Source: http://www.jbgnews.com/2014/10/yahoo-in-talks-to-invest-in-snapchat/461705.html#ixzz3F9rf31bE