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Yahoo to invest in Snapchat
MUMBAI: Internet giant Yahoo is all set to reinvest a part of its cash it earned from Alibaba Group into another fast-growing portal Snapchat at a valuation of $10 billion.
The mobile-messaging start-up Snapchat has reportedly been working to secure capital from a mix of venture-capital firms, money managers and companies.
By investing in Snapchat, Yahoo could be looking to repeat its success by investing in Alibaba. Yahoo paid $1 billion for a 40 per cent stake in the Chinese e-commerce company in 2005, which it sold at a healthy price, state reports.
Snapchat could become an important strategic partner for Yahoo as it seeks new ways to distribute its content, apps and ads in the mobile world.
The three year-old company lets people send messages, photos and video through its app that disappears after 10 seconds. The app has over 100 million users.
Run by co-founder and CEO Evan Spiegel, the funding is likely to make Snapchat one of the mostly highly valued start-ups who have close to zero revenue. Pinterest, which was valued at $5 billion by investors in May, began selling its first advertisements this year.
Yahoo recently bought MessageMe, a small photo and text-messaging start-up in San Francisco.