Alibaba Considers Snapchat Investment

Facebook Competitor Would Likely Be Valued At $10B

Alibaba and SnapchatChina-based Alibaba Group is reportedly in talks that may lead the firm to provide financing to Snapchat, a popular photo and video messaging app that competes with Facebook. If the funding is completed, Snapchat will likely be valued at up to $10 billion, even though the U.S. company generates has virtually no revenue. Facebook tried to purchase Snapchat last year for $3 billion, but was rebuffed.

The potential move by Alibaba would continue the firm’s foray into the U.S. market, following recent deals with ShopRunner, Lyft and TangoMe Inc. The potential Snapchat investment is also seen as Alibaba’s latest counter to Chinese rival Tencent, which offers the WeChat messaging service. Alibaba’s interest in Snapchat was first reported by Bloomberg, which stressed that ongoing negotiations may not lead to a deal.

As of the fourth quarter of last year, Snapchat users sent one another more than 700 million “snaps” – or disappearing messages each day, according to the company. The Snapchat app has been among the top 25 most downloaded apps in the Apple Store in the U.S. for the past year, according to mobile data firm App Annie. Snapchat’s core user demographic is age 13 to 25, with nearly two-thirds being women, company executives have said.

In the midst of its 2014 investments, Alibaba is poised to go public on the New York Stock Exchange later this year in what could become the largest IPO in U.S. history. Founded in 1999 by Counselor Power 50 member Jack Ma, Alibaba gained international notoriety for operating websites where merchants can sell items – including promotional products – directly to consumers worldwide.