Could Google or Tencent Beat Facebook to Buying Snapchat?

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Right now, Snapchat is having its “belle of the ball” moment.

The mobile messaging service – which lets users exchange photos and video that disappear after a few seconds – is being courted by Facebook. It has long been an app that CEO Mark Zuckerberg lusted after.

Thursday afternoon brought another turn of the screw. Valleywag reported that Google could also possibly be considering taking a run at Snapchat, matching Facebook’s $3 billion to $3.5 billion offer. Google and Facebook aren’t commenting, but sources said that Google has indeed expressed some interest in a deal. Tencent, the Chinese consumer Internet company, has also been eyeballing the company, according to sources.

I don’t know Snapchat’s fate, and from what I’ve been told, Snapchat CEO Evan Spiegel himself is unsure of it. But it got me thinking – whether they’re in the running or not, which companies are most likely to go after the fast-growing Snapchat?

Let’s go down the list.

Facebook:
Zuckerberg wants Snapchat bad. So bad, in fact, that he tried – and failed – to clone the app outright. Sources familiar with the matter have described the Facebook CEO as “obsessed” with Snapchat and the idea of ephemeral messaging. They told AllThingsD that he has made multiple offers to acquire the company, some for more than the $1 billion he paid for Instagram last year.

Likelihood: Very High

Google:
Google may have Google+, but it knows it can’t hold a candle to Facebook or even Twitter when it comes to social mobile apps. Buying Snapchat could give Google immediate overnight relevance in social, while simultaneously dealing a blow to Facebook. Not to mention that $3 billion is a pittance for the highly profitable company to spend on an acquisition.

Likelihood: High

Tencent:
This is a good fit. Spiegel has described Tencent as a “role model” for Snapchat in terms of revenue models – potentially alluding to in-app purchasing possibilities for the startup.

And Tencent is indeed interested – if not in a full acquisition, then at the very least in a large strategic investment.

Likelihood: Very High

Yahoo:
A dark horse, and at this point not an entrant as far as I’ve heard. Still, CEO Marissa Mayer has the cash to make the deal, and is no stranger to acquisitions. Plus, an acquisition of Snapchat could help to both bolster Yahoo’s mobile efforts – which are lacking – and burnish its less-than-cool image – sort of like buying Tumblr did.

Still, there’s no evidence to my knowledge that Yahoo has approached Spiegel or Snapchat about a potential acquisition.

Likelihood: Unlikely

Twitter:
After long considering killing off its direct-messaging feature entirely, Twitter woke up last year and figured out that people actually love sending private messages. Another satellite app acquisition – similar to the one it did with Vine – could make sense.

Problem is, the figures being thrown around for Snapchat now are way out of Twitter’s price range. They’re nearly double the amount the company just raised in its initial public offering. At this point, Snapchat is far too rich for Twitter’s blood.

Likelihood: Not at all likely

A caveat to many of the past week’s stories on this topic: It’s possible – if not likely – that the escalating prices and number of companies involved is largely due to jockeying from Snapchat insiders who stand to make hundreds of millions on the deal. Read each new report with that in mind.

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Another thing to remember: Spiegel intends to raise yet another round of funding for his company at a hefty valuation. If another round goes through, there will likely be a secondary component to it, in which Spiegel and co-founder Bobby Murphy could sell some of their own shares and cash out. That means the two could still continue to go for broke and build out their own company rather than sell to the highest bidder, while having the insurance of already having taken some money off the table. And according to multiple people close to Snapchat, Spiegel and Murphy very much want to build out the startup into a full-fledged company.

Bottom line: If Snapchat keeps growing – and sources said that is indeed the case – Spiegel isn’t under the gun to make a decision today. If all goes well, his acquisition offers – and the high prices they command – likely won’t disappear.

Tencent Launches New Mobile Open Platform Initiative Ahead Of Alibaba’s IPO

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Over the last week, we’ve been keeping an eye on Tencent and Alibaba as the two Chinese Internet giants ramp up their competition ahead of Alibaba’s highly-anticipated IPO, which is expected to have a $100 billion valuation. Tencent has been holding its own with products like its popular messaging app WeChat, but it has taken several additional steps to strengthen its position against Alibaba, including a recent $195 million investment in a logistics firm.

Now the company has announced an open platform strategy to attract top app developers (h/t TechNode). This gives them access to Tencent’s app distribution channels, as well as other resources like free consulting services and co-working spaces in Beijing, Chengdu, and Wuhan. In return, Tencent can more quickly build up its mobile ecosystem to compete with Alibaba, as well as other major Internet companies like Baidu and Qihoo.

There are currently about 850,000 apps on Tencent’s platform and developers have earned a total of 5 billion RMB (about $800 million) since 2011, the company said today. With the launch of its open platform initiative, Tencent says its developers will have the opportunity to make twice that amount over the next two years. Along with WeChat, Tencent’s mobile products include messaging platform QQ, the QQ mobile browser, WeChat payment, and several shopping apps.

Tecent’s open platform initiative may also make its app distribution platform, MyApp, which it relaunched last month, more attractive to top developers. The company says that MyApp is currently ranked fourth in China’s app distribution market with a 12% market share, behind Baidu (38%), Qihoo (28%) and Wandoujia (15%).

The country’s app distribution ecosystem is very fragmented, with over 200 marketplaces, but highly lucrative for its top players. For example, this week Wandoujia announced that it raised $120 million in funding led by SoftBank Corp., while last year 91 Wireless was purchased for $1.9 billion by Baidu, the largest acquisition so far by a Chinese Internet company. So Tencent’s aggressive strategy to attract more top developers makes a lot of sense.

Xiaomi will make joint announcement with Tencent next week on product-related partnership with QQ

87326302 520x245 Xiaomi will make joint announcement with Tencent next week on product related partnership with QQ

Rumors typically abound in the Chinese tech scene, and Chinese smartphone manufacturer Xiaomi has been bombarded by plenty recently – with one report a few days back notably saying that Xiaomi had received an investment of $2 billion from Internet giant Tencent via Russian investment firm DST.

In a bid to dispel these rumors, Xiaomi has confirmed to The Next Web that it will be holding a press conference on July 30 (UPDATE: the press conference has been postponed to July 31) to announce a product-related partnership with QQ – Tencent’s instant messaging platform.

The press conference was first announced on Xiaomi’s official Sina Weibo account, which said that it will reveal an “important partnership” next week. Li Wanqiang, one of the seven founders of Xiaomi, elaborated on the teaser by saying that Xiaomi will be collaborating with QQ – but only in terms of products and nothing else.

You can see a (very cute) poster uploaded by Chinese media outlet IT 168 that depicts Tencent QQ and Xiaomi’s cartoon figures on something that resembles a wedding invitation and alludes to a “happy marriage”, sent by Xiaomi to members of the Chinese media.

Xiaomi QQ Poster Screenshot Xiaomi will make joint announcement with Tencent next week on product related partnership with QQ

All we can do is wait and see what will be announced.

Xiaomi has been well on the rise recently, and it would not be surprising at all for more collaborations to crop up, riding on Xiaomi’s success – which has been attributed to its ability to inspire the loyalty of many consumers. Its competitively priced phones are sold in batches that, when released in phases, regularly sell out fast, often within half an hour.

The last phones it launched were the Xiaomi Mi-2S and the Xiaomi Mi-2A in April this year, which followed last year’s launch of the popular Xiaomi Mi2 phone.

The handset maker booked RMB13.27 billion ($2.15 billion) in revenue for the first six months of this year, exceeding the amount it recorded for the whole of 12 months, which stood at RMB12.6 billion. The 7.03 million devices sold in the first six months this year was also just shy of the 7.19 million units that Xiaomi sold during the whole of 2012.

Earlier this month, it was reported that Xiaomi will be closing a round of funding at the end of July that values it at $9 billion.

Headline image via Thinkstock