David Rosenthal: belief

Transcript context

…Yeah. Let me throw in another hypothetical future for you, and this could still happen. So this is not somebody buying Snapchat but rather the reverse. So we live in a world where Google and Facebook are the vast majority of social network-based advertising that’s being bought and they’re totally eating into all programmatic and display also. They’re mega giants. And Facebook gets these economies of scale for their advertisers by adding additional networks into the portal. So they have channeled these advertisers, the advertisers are used to buying ads on Facebook, they buy Instagram and then suddenly, bam, now I can also just upload a different image size and advertise on Instagram too. So what is Snapchat’s way of getting into that competition, is starting to aggregate anyone that’s left. So right now, Twitter is valued at $11 billion. Their market cap is $11 billion. And that's probably too high. Like if that was lower, then somebody would probably actually pick them up but right now they’re kind of priced too high for anybody to feel good about that purchase. If they continued to topple, Snapchat’s got new money in the bank, they’ve got this really, really high market where they could do a stock deal, like what if Snapchat bought Twitter and then enabled advertisers to have a single portal to buy advertisements on both platforms and then sort of win on a spree. It feels completely antithetical to me to Snapchat’s DNA and perhaps there actually is no economies of scale since those ad formats are so different. But it sure paints an interesting picture of what could Snapchat start to do with this cash they’ve just raised and this concrete public market validated valuation. That's really interesting. I think what another interesting question is, what if it’s not Twitter but what if it’s Fox or what if it’s a television media company that Snapchat would buy. Well they’ve got that relationship with Viacom. I don’t know if that still exists but Viacom, I think they might have dissolved that but Viacom was there channel sales for a while for all the Snapchat ads.…

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