August 8, 2017
Google is joining Facebook in seeking to undercut Snapchat by offering similar features. The company is reportedly developing Stamp, a so-called news product that will offer articles in a magazine-like design, similar to Snapchat’s Discover feature. Snap, however, isn’t standing still, with plans to focus Discover more on episodic video content. News of Google’s development of Stamp follows buzz that the company floated an offer last year to purchase Snap for $30 billion, according to sources who call it an “open rumor.”
Bloomberg notes that, “Stamp evolved from media relationships Google already has for another one of its products, called AMP, which is meant to help load articles faster.” (The “St” in Stamp is said to stand for “stories.”)
“The success of the open source AMP project is down to the constant collaboration with publishers that involves working early on upcoming features,” said Google in a statement.
“One of the main attractions of Google’s service is that it would be tied into the company’s search product,” according to The Wall Street Journal. “The Stamp versions of stories could be surfaced in Google search results, or within other Google products, people familiar with the program said.”
In regards to Google presenting an offer to buy Snap in 2016, Business Insider reports that “three people, including people inside and close to the company, separately confirmed they had heard the chatter and price tag, with one calling it an ‘open secret’ among Snap’s upper ranks and certain tech industry circles.” Further, insiders say that although “it’s unclear how formal the discussions … may have been … Snap and Google have long been close.”
Google’s “initial offer would have been discussed just before Snap raised its Series F round of private funding in May 2016, valuing the company at $20 billion,” and “CapitalG, the growth equity fund managed by Google’s parent company, Alphabet, ended up quietly participating in the round.”
News that Snapchat had declined two offers to be acquired by Google “could be especially painful for investors and employees grappling with the company’s sinking stock.” Shares currently trade at around $12.50, with a market cap of about $14 billion compared to the $24 billion valuation at the time of its IPO.
According to sources, there is “mutual respect” between the two companies’ leadership, with Alphabet executive chair Eric Schmidt acting as an early adviser to Snap chief executive Evan Spiegel. Snap is also a heavy user of Google Cloud and, internally, Google’s apps. Snapchat also turned down an earlier acquisition offer from Facebook.