Snapchat is valuable not only because of its fade away photos. Snapchat has messaging features (for text, photos and video); socially shared posts; and even a professional news platform. Time spent by US teenagers aged 14-17 on the app rivals Facebook (30 minutes per session on Snapchat, versus 34 for Facebook, according to Magid Associates). Its young, engaged audience, most users are under 30, makes it popular with advertisers.
Whether Snapchat itself might be as ephemeral as its photos remains to be seen. It has grown fast. Snapchat has five times as many users as Facebook did at the same age (3.5 years old). It has also been faster to commercialise: Cowen estimates the app had $200m in revenues this year, mostly from ads. But it is early days; it could disappear just as quickly (remember MySpace?) Already users bemoan a clunky design as new features clutter the interface.
None of this has stopped investors. A $16bn valuation for Snapchat, roughly $90 per user, would be on par with Twitter ($95 per user), though less than Facebook ($145 per user). These valuations are as much a reflection of the cash sloshing around the tech sector as of real users and profits."