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Facebook fails in attempt to buy Snapchat

Graeme Parton

The man behind Snapchat – an image-messaging app popular among young smartphone owners – has reportedly refused to sell the company to  Facebook after the social giant offered more than $3 billion.

The firm, founded by Evan Spiegel, allows users of its app to communicate with friends using only images, which then disappear very shortly after being sent.

Spiegel said he turned the offer down because he has had further interest from other parties. If he’d accepted, it would’ve been Facebook’s biggest acquisition so far.

The attempt comes after a number of studies found that the social network was falling in popularity among young users, many of whom have retreated to other sites like Twitter.

LA-based Snapchat, which was launched only two years ago, has also been approached by Chinese firm Tencent Holdings, which valued the start-up at around $4 billion.

The offer comes after two other social media companies were given some rather large valuations. In its IPO, Twitter was given a market capitalisation of almost £25 billion, while Facebook’s reached more than $100 billion.

Facebook recently admitted that its teenage users are spending less of their time using the site. David Ebersman, the company’s CFO, talked about the issue in an earnings call last month. This admission led to a significant dent being made on the Californian company’s valuation.

One analyst, Julie Ask from Forrester, suggested that Facebook’s move should come as no surprise to anyone. She said that it makes perfect sense for Zuckerberg’s firm to find out where teens are spending most of their time and do what they can to make the most of it. This idea fits in well with the company’s movements in 2012, when it took over photo-sharing network Instagram in a deal worth around $1 billion.

Graeme has experience creating content for online sources and for the radio, and at university he studied Multimedia Journalism.

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