Snapchat, the ephemeral messaging application that doesn’t actually erase your messages, is valued at $3.5 billion with no revenue model to speak of, according to AllThingsD. It was the second Visual Web-based application that fetched such a hefty price tag last week, and the Internet most certainly balked.

While the huge valuations might be a head scratcher, at least Pinterest, the other social network valued at over $3 billion, gives investors clearer potential for revenue. The company can target users with advertising (albeit the ads might be hard to parse from the actual content), and pins drive traffic and action to other websites.

So, is Snapchat part of the evolution of the Visual Web that appeals to investors, or is it another inflation of the growing tech bubble that puts seemingly arbitrary price tags on apps that are running hot?

Snapchat Is Growing Up

Prognosticators are quick to point out that where the youth are, the people follow. And youth are abundant on Snapchat.

But a Pew Internet study released today reveals that 9% of cell phone owners use Snapchat, a significant number that proves the photo- and video-sharing application isn’t just for kids. 

The general consensus is that the fleeting messaging service is used for “sexting,” or sending inappropriate disappearing photos to your friend or significant other, or drawing beards on unsuspecting faces—at least that’s what the majority of people told me when I asked around. 

But there were a few I questioned that use snaps as a way of creating and distributing fleeting moments and exercising a desire for impermanence.

“Like selfies, photos are less precious and more about communicating moments and the process of life,” said Dr. Pamela Rutledge, director of the Media Psychology Research Center. “Images are a richer media than text and transmit much, much more information, such as emotions and environment as well as trigger our own mental images and associations.”

Which begs the question: how can you make money off of fleeting experiences?

At this point, the over 350 million snaps sent everyday don’t translate into revenue for the San Francisco-based startup. 

During TechCrunch Disrupt earlier this year, Snapchat CEO Evan Spiegel was tightlipped about how his company plans on making money. 

“Monetization is a great topic we think a lot about,” he said. “The way we think about monetization has changed substantially.”

Well, it’s a good thing a company seeking to raise additional funding at a $3.5-billion valuation wants to start making money off its application. 

As AllThingsD notes, Snapchat could be in talks with a party from Asia. Spiegel told the blog that his company is “excited” about in-application transactions because it has proven successful in Asian markets. 

The Psychology Of Snaps

Rutledge said that Snapchat is akin to an exclusive community group, and that the temporary images define who is in your snap “crowd.”

“There’s an exclusivity, an affiliation, a group membership thing that makes Snapchat awfully appealing,” she said. 

The allure of temporary exclusiveness is what draws people to the application, but Snapchat has introduced new features that make the fleeting messages much more substantial. Snapchat Stories, released earlier this month, are collections of snaps from the previous 24 hours that users and their friends can watch over and over throughout the day. 

Will the attraction to momentary memories stick with the Stories feature that keeps snaps for 24 hours?

According to Rutledge, Stories require an act of creation, and become slightly more precious mementos of things the same way photos in an album do. The attachment to images and desire to keep them goes against what Snapchat originally created.

But it could be the same desire for impermanence and exclusivity that attract investors to the application in the first place. To be a part of the small, but growing club that has added big players like Tumblr, Pinterest and now Snapchat.  

The desire to be a part of the billion-dollar bet, whose players are banking entirely on pictures. 

Image courtesy of Snapchat.