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Google's reported interest in buying Snap — including a $30 billion bid last year and a standing offer since Snap's March IPO in the same range — has the potential to make the most dominant player in digital advertising even stronger, according to Business Insider.
The search giant accounted for nearly half of US digital ad revenue in Q1 2017, and gaining access to Snap’s largely millennial user base would likely bolster this figure — Snap generated roughly $388 million in advertising revenue in 2016.
Google’s reported offer is much bigger than the $3 billion offer Facebook made for Snap in 2013, which Snap declined. It is also higher than Snap’s nearly $24 billion valuation at the time of its March IPO, and well above Snap’s current valuation of about $15 billion.
Here’s why acquiring Snap would make sense for Google:
- It would gain an established social network. Google has largely been unsuccessful in creating social networks itself — Google Buzz, launched in 2010, received backlash for its poor privacy settings, while its successor Google Plus was never able to compete with social giants. Rather than risking more financial resources on another potentially unsuccessful social effort, Google would own Snap’s network of 166 million daily users. Adding an attractive social networking and messaging platform would be a transformational boost to Google’s ecosystem.
- Each company would benefit from the others’ data and technology chops. Snap would have more to gain from Google’s data and advertising technology, though Google would no doubt benefit from some of Snap’s technology too. For example, Snap’s acquisition of social mapping company Zenly and partnership with Factual could bolster Google’s ad campaign attribution capabilities.
- Snap and YouTube could consolidate original video ambitions. Both platforms have been pushing for partnerships to secure video content, as a way of capturing ad spend that is shifting towards digital. For example, Time Warner partnered with Snap to create original shows for its platform, while YouTube Red is investing in more original series for 2017. The companies could begin to offer bundled deals, where shows being developed would be shown on both Snap and YouTube, potentially increasing its value proposition and driving ad revenue.
- There are opportunities for integrating Snap features into Google products. Google could own a robust live search feature powered by Snap’s Stories in Search functionality, which is essentially a search engine for user submitted Stories. Users can use Stories in Search to view how crowded a certain business or event is. Google could consider integrating Stories in Search into its web search engine. Additionally, Google could consider implementing and syncing Snap Stories into the YouTube mobile app. This would inherently make YouTube a more social platform and could cause users to stay in-app longer.
Social networks are here to stay, and they're constantly evolving. Globally, more than 2.8 billion people — or 37% of the world's population — use social media, but the way those users interact with each other, and the platforms they adopt, vary widely.
Kevin Gallagher, research analyst for BI Intelligence, Business Insider's premium research service, has put together a report on social media demographics that highlights the key audience demographics for six major social platforms: Facebook, Instagram, Snapchat, Twitter, LinkedIn, and Pinterest. It also:
- Breaks down the reach of social platform audiences in terms of age, income, education, and gender.
- Examines how time spent and monthly users across major age brackets have changed in the past three years.
- Explores the preferences of US teens and young millennials, and how they're changing.
- Identifies the most important demographic changes that advertisers should monitor as social platforms continue to grow.
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