Facebook bought Instagram for $1 billion last spring in a defensive measure.
The main reason people use Facebook is to share photos, and Instagram was threatening this dominance on mobile, where consumer computer usage is going.
Now there is a new startup that presents a similar threat.
It's called Snapchat. It's an app where users send each other self-destructing photos. Teens use it to send each other provocative images, which adults call "sexting."
Like Instagram, it's a mobile photo-sharing app, and it's come out of nowhere to grow like crazy.
Facebook already tried to build a Snapchat clone, which failed to gain wide adoption.
Snapchat poses a real threat to Facebook, and because of that it wouldn't surprise us if Facebook – or one of its rivals like Google, Yahoo, or Twitter – stepped in to acquire it at a massive premium over its current $50 million valuation.
There is only two things that could prevent Snapchat from having this kind of exit this year or next:
- It proves to be a fad, and teenagers drop it for something else.
- Snapchat's cofounders think they are the next Mark Zuckerberg, and try to build a long-term company out of the app.
Over on Quora, Jason Martin breaks Snapchat's growth down succinctly with charts and a timeline.
Read Quote of Jason Martin's answer to Snapchat: How did Snapchat get traction? on Quora
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