How are these companies even making money? Are there even advertisements on this app? This is where it is at folks. Go and make an app that take pictures that you can send to friends and be valued at billions of dollars!
yay for cheap money. As I work in the industry i'd say it is nothing special about the app or the platform, it is pretty easy to architect and build something like Snapchat, Twitter and Instagram. It's the user base they are valuing. But how will they monetize it to turn out a net profit? pumping the chat full of ads? The valuations of some unicorns are a joke. But I like some infrastructure unicorns that innovate and provide true value to society, like SpaceX, Tesla, Bloom Energy, Docker, CoreOS, Puppet, MongoDB, etc.
You are onto the right path, imho. I believe 2 main items are behind such valuations (and of course the valuation itself is debatable): 1) The information that can be gleaned and re-used/sold from the customer base (big data) 2) Advertising, and obviously those valuations only hold when one believes that advertisers will continue to believe that the perceived return from ads justifies the outrageous cost)
Instagram changed some of their platform and now there are advertisements especially for users who have 500,000 followers and up I'm noticing that they are now advertising to their followers.....followers DO NOT want to see advertising....they have no other way of monetizing anything on these applications but to show advertising and I have to say its Lame Lame Lame. Snapchat is worth at most maybe 5 million bucks. Only fools would jump in on a bubble like that....
Just to play devil's advocate, they have $400mn active users. Can they get 10 cents from each of them? Maybe if they don't want to pay $0.10, then use their PCs to solve a bitcoin problem or something. If so, $40mn a month, $0.5bn a year, and so why not $5bn valuation with a P/E of 10? P/E of 10 is a 10% interest rate, vs 0% at the bank.
They are going to have to start charging a premium to use these services, otherwise they are not going to survive. We are already seeing with, for example, with YouTube RED ($10/mo to remove ads). Although the first couple of social networks that try will probably fail as people don't want to pay for something that used to be free. It will have to be a newer network that actually provides utility that people will be willing to pay for (e.g. Not Snapchat lol).
lol, i work next door to snapchat and we make way more money than them with 1/10 as many employees. Snapchat is a joke. It should only take 10 engineers to run it, not 300.
No way they have 300 engineers... I've always wondered what the hell they do all day. It's funny because their ONLY way of directly making money right now is image filters... filters... (and of course selling all that data).