Yes, you are entitled to believe it's worth nothing. But the only problem is that, the market has decided it's worth anywhere from $0 to $3 billion.
Facebook is not paying for the software. A very good hacker can put together a snapchat app in an afternoon. Facebook is paying for the traction and the fact that the people who are using both services are not exclusive set of people. therefore, the more a user spend time on snapchat, the less she spends on Facebook.
As already mentioned, this is not about how much they are making now, it's about how much they could potentially make in the future. Facebook knows this better than you and I because they've been there.
Any dollar that SnapChat makes in the future is potentially a dollar facebook would have lost and that is what they are trying to protect.
FB can throw $10b at snapChat and some people (me not included) will still find sense in it. Look, if on March, 2006, a 'crazy' billion said he has envisioned that twitter is the next big thing and threw $5b for a 99% stake, everyone would have called him shit crazy but in just 7 years, he would have made a cool $16b on his investment.
No matter what you think about how silly the service is, its ability to be monetized is where the value lies.. In a logical world, an investment in coca-cola shouldn't be considered a safe one at all, but here we are!
Facebook is not paying for the software. A very good hacker can put together a snapchat app in an afternoon. Facebook is paying for the traction and the fact that the people who are using both services are not exclusive set of people. therefore, the more a user spend time on snapchat, the less she spends on Facebook.
As already mentioned, this is not about how much they are making now, it's about how much they could potentially make in the future. Facebook knows this better than you and I because they've been there.
Any dollar that SnapChat makes in the future is potentially a dollar facebook would have lost and that is what they are trying to protect.
FB can throw $10b at snapChat and some people (me not included) will still find sense in it. Look, if on March, 2006, a 'crazy' billion said he has envisioned that twitter is the next big thing and threw $5b for a 99% stake, everyone would have called him shit crazy but in just 7 years, he would have made a cool $16b on his investment.
No matter what you think about how silly the service is, its ability to be monetized is where the value lies.. In a logical world, an investment in coca-cola shouldn't be considered a safe one at all, but here we are!