Alibaba Group Holding Ltd.(BABA – Analyst Report) will invest $200 million in Snapchat Inc., a photo messaging app developed by Evan Spiegel, Bobby Murphy, and Reggie Brown when they were students at Stanford University, Reuters reported.
The investment values the company at approximately $15 billion, according to Bloomberg.
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Edwin Chan and Bill Rigby writing for wondered what immediate value the startup would bring to Alibaba, with Snapchat currently blocked in China.
The speculation is that Alibaba — China’s biggest online seller, and Tencent, China’s biggest social networking and entertainment company, are preparing for the time the limits on Internet use are removed. They each don’t want the other guy to have the app exclusively.
They also figure Alibaba is interested in Snapchat’s use as a payment service.