Snapchat Finding Out What Happens When You Refuse A Facebook Buyout

Snapchat turned down a $3 billion acquisition offer from Facebook Inc (NASDAQ: FB) in 2013. In the two years since then, Snapchat has achieved exponential growth in usage.

Although Snapchat remains much smaller than Facebook, it has surpassed Twitter Inc (NYSE: TWTR) in terms of domestic daily active users, BTIG’s Richard Greenfield noted in a report.

Instagram Follows Snapchat Footsteps

The recent launch of Instagram Stories came as a surprise. Greenfield wrote, “Instagram stories is essentially Instagram copying Snapchat Stories, one of the primary use cases of Snapchat.” He added that Instagram Stories benefits from robust technology as well as Facebook’s broader engineering team.

Related Link: Instagram's New Feature Copies Snapchat's Stories

“We suspect Instagram Stories will ultimately be algorithmically ranked to make sure you see the content most relevant to you first versus the most recently updated stories, just like we have seen with the core Instagram feed,” Greenfield mentioned. He expects Snapchat to also make this change fairly soon.

Snapchat To Grow

Instagram faces the challenge of users feeling the pressing need to post incredible pictures that attract a large number of likes. Consequently, users have started posting less and also removing content that did not generate enough likes.

“The permanence of Instagram photos in a perverse way has become one its most limiting factors,” the analyst commented.

On the other hand, Snapchat has a unique combination of messaging and content, which would enable it to “continue to grow users and time spent rapidly,” Greenfield believes.

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