Tech giant Google has repeatedly failed to make its mark in the social media scene with its Google+, Buzz and Wave flops, so it considered buying the teen sensation app, Snapchat. The search giant reportedly held informal talks with Snapchat and floated an offer of $30 billion in 2016 before Snapchat went public last year, according to Business Insider’s Alex Heath. The offer was apparently an open secret inside Snap, and was on the table after the IPO, too.
But Snapchat’s adamantly independent CEO Evan Spiegel has shown no interest in selling his multi-billion-dollar company to Google or anyone else. The decision comes despite the startup’s market cap slipping to around $15 billion after soaring as high as $30 billion when its IPO launched in March.
It is unclear how formal the discussions were, but Snapchat and Google have long been close. Informal discussions between companies are frequent in the tech world, especially surrounding major events, like an initial public offering or a large round of fundraising.
Moreover, Google’s growth-stage investment fund CapitalG ended up investing in Snap after the 2016 talks went nowhere. The organizations have long been in each other’s good books. Google Chairman Eric Schmidt was an adviser to Spiegel, Snapchat runs Google’s office software suite and has also committed to spending $2 billion on Google Cloud hosting over the next five years.
Also, joining forces could be beneficial to both companies. The acquisition would help Google get a top social property to make up for its flops. It could also obtain data about people’s social graphs, where they spend time and what topics they care about, allowing Google to improve its ad targeting and measurement.
Snapchat would gain a deep-pocketed parent that could provide the additional capital needed to make necessary acquisitions and build out its R&D-heavy augmented reality technology. Machine vision and image recognition algorithms from Google Search could unlock information about what is in everyone’s Snaps. Google’s advertising expertise and connections could also boost Snap’s ad revenue. Together, they could also align their Google Glass and Snapchat Spectacles hardware efforts to build a powerful but appealing AR device.
However, Google’s open, engineering-driven culture could clash head-on with Snap’s secretive, design-driven culture. The 27-year-old Spiegel would ultimately decide whether to sell Snapchat or not, and people close to the company say he is fiercely independent and has shown no serious interest in selling the company. Furthermore, he is widely considered to be a visionary, contrarian CEO who values running his company in Southern California, outside of the Silicon Valley bubble where Google’s parent Alphabet is headquartered.