Snapchat could flash advertisements before and/or after 'snaps'. How big that ad market is would just be a guess with little data to back it up.

The big risk for Twitter, Snapchat, and some degree Facebook is the more money they attempt to make off of users, from advertising, the easier it is for someone else to start a less intrusive competitor. The cost of creating, launching, and maintaining a service like this will keep dropping.

Facebook purchasing Snapchat is just creepy. They think delete=hide.