Google allegedly wanted to buy Snapchat for almost 2x its present value.
According to Business Insider, Google wanted to acquire Snapchat for $30 billion USD last year. The silicon valley based search giant apparently held informal talks with Snap just before they raised their Series F funding totaling $1.8 billion.
Looking back, the acquisition would have been a better option. The offered amount is almost double the Snap Inc’s current market cap of $16 billion.
Google refused to comment on the rumors and a rep from Snap also denied them. Snap’s rep said there hasn’t been any formal discussions on the matter.
We still believe Google did hold informal talks with Snap. Google’s investment arm CapitalG quietly invested in Snap’s series F funding. This was presumably done after Snap’s CEO Evan Spiegel showed no interest in a buyout.Google Offered $30 Billion USD for the Snapchat appClick To Tweet
Why the Acquisition would be Beneficial to Both.
This deal would have been beneficial to both companies. The two companies have an existing working relationship. Snapchat already spends a ton of money on Google Cloud. The teen sensation app reportedly pays around $400M USD per year to Google Cloud to keep the app running.
A buyout by Google would mean Snapchat would gain access to Google’s $75B+ cash reserves. With such deep pockets Snap can fast-track its research and development into augmented reality technology.
Together they could develop a better monetization strategy to increase Snapchat’s share of digital ad revenue.
Additionally, they could also merge the developments of Snapchat Spectacles and Google Glass. Google Glass has the power whilst Snapchat Spectacles has the looks. By aligning their development efforts, Google can come out with a stunning yet powerful glass.
Sadly, we may not be seeing any of these soon as Evan Spiegel has proven countless times he’s not ready to let go off Snap. This isn’t the first time a buyout offer has been made. In 2013, Snapchat turned down Mark Zuckerberg’s purchase offer of $3B USD.