Facebook Inc. (NASDAQ:FB) is making more money than ever, but the Menlo Park, Calif.-based company admitted in its third-quarter earnings report that it's noticed a decline in usage among teenagers. As IBTimes reported on Monday, many teens prefer mobile messaging apps like WhatsApp and Snapchat than Facebook to communicate.
Facebook has obviously taken notice of the trend, and the Wall Street Journal reported Wednesday that Facebook offered to acquire Snapchat for $3 billion in cash.
Snapchat, a 2-year-old company based in Venice, Calif., that now has 5 million monthly active users, rejected the offer.
Snapchat allows users to send pictures or video messages that erase just a few seconds after they are seen. Teens like it as a way to send messages that they don’t want recorded forever on social networks like Facebook, particularly sexually explicit images in a practice known as “sexting.”
Though Snapchat is currently a free app and doesn’t make any money, investors are hoping to capitalize on its popularity with teens. In June, Snapchat raised $60 million at an $800 million valuation.
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Snapchat may have rejected the recent $3 billion offer because of an offer from Chinese e-commerce company Tencent Holdings to invest $200 million in Snapchat, which would value Snapchat at roughly $4 billion.
Tencent already owns WeChat, a Chinese mobile messaging app with more than 200 million users.
Facebook previously offered Snapchat $1 billion -- the same amount it paid for Instagram -- hoping to incorporate the temporary messaging into its repertoire of mobile services. If Snapchat accepted the $3 billion offer, it would have been Facebook's largest acquisition to date.
Neither Facebook nor Snapchat have commented on the report.