After the start of Snapchat, Mark Zuckerberg witnessed an exodus of Facebook users. Teen users were feeling dreary to use Facebook and leaving to join Snapchat. The Facebook CEO offered Snapchat a $3 billion acquisition. People familiar with tech matters were shocked when Snap rejected the deal. Now it cleans the matter. Actually, Snapchat founders are careful about not losing control of the company.
After the social networking market leader’s failure, Google came with another all-cash $4 billion offer. Snapchat nodded negatively like before.
Snap Inc. brought changes in the charter
Those two previously rejected transactions give us an idea that Snapchat CEO and co-founders want to keep the control of the company even after the IPO launch. They do not want to face the consequence Google and Facebook co-founders are encountering in terms of controlling. In fact, Snap Inc., formerly known as Snapchat already revised its charter. By the new changes, they ensured the majority voting control. Consequently, founders of Snapchat will not lose voting power as Facebook and Google founders did once they went public. For Snap founders it is a bold strategic move.
However, after the abortive acquisition attempt, Google secretly made an unpublished investment in the next social juggernaut. Google invested in the company with its investment arm, CapitalG. As a matter of fact, it shows that Google is tremendously interested in Snapchat realizing its eye-popping growth in the social networking business.
According to Equidate, a stock market for private technology companies, 74% of the company belongs to the CEO, Evan Spiegel and Co-founder and Chief Technology Officer Bobby Murphy. In contrast, Larry Page and Sergey Brin of Google had 41% ownership while Facebook’s Mark Zuckerberg had 56% after both companies went public.