A week ago Evan Spiegel was fighting off speculation that Snapchat’s privacy hack may have cost his company the chance to be gobbled up for $3 billion or more by the likes of Facebook (FB). That’s already ancient history. In the attached clip Eric Jackson of Ironfire Capital says Snapchat and the rest of the social messaging space is going to get nothing but hotter in 2014.
Citing Line in Japan and Chinese monster Tencent in particular, Jackson thinks the social app space is taking the browser middleman out of the app buying and search expierience. As if that alone weren’t valuable enough the existing social players are scared senseless by the start-up crowd.
Users are already using the social apps to play games and buy things directly, notes Jackson. Since they can already replicate the networking synergies of advertising via social media, Facebook and Twitter (TWTR) aren’t the only ones who should be afraid, search giant Google (GOOG) needs to be involved as well.
With recent acquisitions of social apps like Tumblr and Instagram along with the Line IPO, Jackson’s predictions for 2014 are going to keep an underlying bid in place for the aggressive start-up messaging systems and social networks. The public companies have money to burn and the social start-ups have the very real option of going public. That makes it a seller’s market for the newcomers.
Don’t think of Snapchat et al as just an untraceable way to send selfies and (possibly) corrupt trading ideas - they’re “new browsers for the mobile age.”
When he puts it that way, maybe Snapchat doesn’t need competent management or actual security to be worth $4 billion in the open market.
Disclaimer: Merrill Lynch is not responsible for the editorial content of this program.
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