Snapchat, a self-destructing photo messaging app developed by Stanford University students and launched 2011, is now hiring people from the same university and from the University of Southern California as well to increase their current headcount of 12.
Co-founders Evan Spiegel and Bobby Murphy are planning to increase the app’s valuation for as low as $100 million and plans to raise it through $1 billion according to a Twitter post of Fortune business analyst Dan Primack. Snapchat will be using a monetization scheme to achieve the goal. The sales team will be responsible for inviting businesses to place ads on their site while the developers work on more servers to further expand the capability of the app.
Some may say that $1 billion is impossible for a photo app but a KPCB report revealed that Snapchat has a huge potential as it ranks next to Facebook among photo sharing apps beating Instagram. In fact, the app is now sharing up to 150 million photos per day. The app is a non-revenue service but it seems that the developers have finally realized how much they could have possibly earned if they set a valuation on it.
Snapshot's idea of a self-destructing photo made a market for students on its initial release wherein the photo will be automatically deleted by the system 10 seconds after being viewed. However, most of the users now are not students with 57 percent of age between 19 and 25 are using Snapchat while only 52 percent goes to Facebook. This can make advertising effective as these ages pay for purchases unlike the teens that have limited resources.
Let’s see how far Snapchat can push through with this goal despite a report that appeared in Forbes that the photos were not really deleted and can be recovered using some tech skills. There is also a filed antitrust complaint in FTC about this deception.
