NEW YORK (TheStreet) -- How much does a disappearing picture cost? To the owners of Snapchat, a lot more than $3 billion, if reports from The Wall Street Journal are proven true.
Facebook (FB) allegedly offered at least $3 billion to acquire Snapchat in discussions with the company over recent weeks but has since been rejected, according to WSJ sources. The recent offer is triple the value of a previously-reported acquisition attempt three weeks earlier.
At just two years old, the app has yet to generate any revenue as its photo messaging service, which allows users to view pictures for a limited time, is completely free to download and use.
Co-founder and CEO Evan Spiegel is reportedly turning down offers until next year on the hope the service will have a greater number daily active users (DAU), cause for a higher valuation.
An acquisition of the app, popular among teenagers, would be a crucial strategic peg for Facebook to stopper the leak of younger users to alternative social networks. In its recent third quarter, the social network said of its 728 million DAUs, use among teenagers had declined, a comment which rattled appetite for the stock. Facebook-owned Instagram, however, is increasingly popular among the demographic.
The reasons Facebook would want Snapchat (to reiterate, a company with zero revenue) is in the details. In October, the app maker said it supports 350 million "Snaps" sent each day, a 3,400% increase from a year earlier. Though Snapchat has never released its exact number of users, a Forbes estimation puts the total in the U.S. at 26 million based on data from a Pew Research Center study. With its rampant popularity among teenagers, these are figures Facebook can't afford to ignore.