<p><pre><code> 400,000,000 active users [0]
16,000,000,000 USD
----
$40 per user
</code></pre>
That's an incredible cost. We can assume Facebook is paying for the userbase, the app itself and it's infrastructure would basically run itself. It's less appealing when you realise that there's probably a miniscule fraction of WhatsApp users that don't have a Facebook account.<p>> <i>WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee</i><p>Now it makes even less sense.<p>[0]: <a href="http://blog.whatsapp.com/index.php/2013/12/400-million-stories/" rel="nofollow">http://blog.whatsapp.com/index.php/2013/12/400-million-stori...</a>
Sequoia just landed a 5x return on their fund with this one deal.<p>At a rough guess, they put in $8m for 15% of the company in 2011, valuing it at around $53m.<p>A $16B sale is a 300x increase in value, so Sequoia's stake is worth $2.4bn. Their standard fund size is around $500m.<p><a href="http://www.reuters.com/article/2013/08/16/us-sequoia-funds-idUSBRE97F0WW20130816" rel="nofollow">http://www.reuters.com/article/2013/08/16/us-sequoia-funds-i...</a>
My uncle in India runs a construction company, and literally every single aspect of company communication is done over WhatsApp. Each construction site has to constantly post pictures on WhatsApp, and basically all management and payroll decisions are made through WhatsApp discussions. Apparently this is not an uncommon practice, as businesses that were once administered by pen and paper are now using WhatsApp to improve efficiency and reach new customers.
Damn, Zuck is <i>far</i> more paranoid than I thought. He's going to have to come up with a better strategy than buying every company that presents a potential existential threat though. Especially at these prices!<p>I actually think it wasn't such a bad idea to buy Instagram. He paid 1% for something that <i>really</i> could have killed him. But paying $16 billion here is pretty much surrender as far as I'm concerned.
For everyone saying this is a waste of money, consider the commentary around Instagram at $1B. Basically the world said that this was a horrible acquisition at the time, but in retrospect, buying Instagram was quite cheap. Buying your closest competitor for less than 15% of your market cap is usually a good idea.<p>Fast forward to today. What'sapp is the dominant messaging application across the world. Carriers hate it but they can't do anything to stop it. Facebook hates it and no matter how much they improve facebook messenger, they keep falling behind.<p>This represents a massive existential threat to Facebook's business: engagement. To kill their closest competitor for, again, less than 15% of the company, is a rational decision.<p>Since Viber and What'sapp have both exited the market, I think it's time for someone to build a new messaging app. There's a lot of room in a once incredibly crowded space.
When these bubbles really get crazy, you start questioning your sanity and wondering whether maybe you're just plain wrong. You actually start wondering if the valuations are justified after all, whether it be a house, stock certificate of a tech company, the mineral rights to some acres in the Haynesville shale, or some land on the Vegas Strip. My head hurts.
I know What's Up. Facebook just bought the world's largest (and unlisted) mobile phone number directory:<p>WhatsApp's convenient 'matching by phone number' feature uploads of all of your phone contacts to their servers. Though positioned as one of the good guys, they too had their price.<p>With this acquisition, FB bought the ultimate data set of users and leads, and with it secured access to the last remnants of your privacy.<p>Your fake name/profile on FB will no longer protect you. Your friend's contact list spilled the beans months ago...<p>Uninstalling WhatsApp now, though I realize that after several lovely years might just be too late already.<p>Cat, bag, out of. Such wow. Much sad.
To everyone calling this symptomatic of a "bubble", remember that WhatsApp was <i>not</i> hyped like SnapChat or Instagram. It wasn't associated with "sexting" or plugged by Celebrities. A few years ago, my cousin arrived from India to start undergrad here .. when picking out her new smartphone, here was only one requirement: it <i>had to</i> run WhatsApp. She didn't care whether it was an iPhone, android or blackberry (back when bb's were a thing). She didn't care about the camera or processor speed. Her decision was based on a measly little app that I'd never heard of. WhatsApp just made something people wanted, <i>badly</i>.<p>It's even profitable, for crying out loud.<p>Whether this is a good decision and price for Facebook is to be determined. Many thought Google overpaid for Youtube and FB overpaid for Instagram, and look how those turned out. In addition Zuckerberg likely thought that much like losing image sharing, losing messaging would pose an existential threat to Facebook.<p>Zuck's strategic track record has been stellar, all the way back to the beginnings of Facebook. The one "mistake" he admitted to (HTML5 vs native) was corrected promptly and thoroughly. I'm willing to bet he's got a much better handle on these things than given credit for. I'm long on FB and buying on any dips.
Facebook suddenly acquired the world's (if we exclude the US and China) most popular messaging service. I communicate with this app with all my friends, and share stuff that i have no intention of ever putting on Facebook. Everything that once seemed 'private' is now in the hands of a website that forces it users to share as much as possible with marketeers and advertising companies. It's gonna be one tough mission for FB to convince WhatsApp users they're not gonna be playing around with their data.<p>If there's one moment to launch an email-like distributed protocol and app for instant messaging (and somehow convince all my friends to use it), i guess it's now.
I just can't get my head around that valuation. For something that's basically a feature, when they already have that functionality baked in, built out to a similar scale?<p>It's not an acquisition for talent, or technology, so what is it? It's an acquisition for investors probably. To argue back against the people who say the kids are leaving FB. Well guess what, we BOUGHT the thing the kids are using. And it's 'mobile first'.<p>They can probably continue to buy the 'cool app of the week' for the rest of their existence. Probably not at THIS scale, but certainly the $1-2b range. The rest of their user base is pretty solid. As long as they can show their advertisers that they're appealing to young people too, it's probably a strong plan.<p>They just really screwed up on messaging, and let these guys grow too big before deciding or being in a position to buy them. Doubt they'll let it happen again! They'll have their eyes open and will snap up ANY new apps that show strong user growth in younger markets.<p>Tech people have a major bee in their bonnet about Facebook. We kinda assume the kids are flocking away for the same reason we are: privacy. But it's not. Kids just get bored easily so they like to try new things. Young people aren't 'leaving' Facebook, they're just using other stuff alongside it. Facebook just has to provide one or two interesting buzzy distraction apps to last until the kids turn into adults, get jobs, and use Facebook exclusively again because it's where everyone is, and they don't have time for 15 separate apps any more.
This is just ridiculous. As per their latest financial statement, $16B is $B more then they have in the bank. Part of that is stock, but still...<p>On top of that, it's 8 times more then their 2013 net income!<p>People say it's defensive play, but to me it looks like overly aggressive play with huge risk and very little potential. Facebook already has huge market share with their messaging platform, and they really don't need this that badly.
That is a LOT of money.<p>That being said, I use WhatsApp every day to chat with my friends around the world and it's really excellent. I know it's used a lot in other parts of the world even more, so I doubt this purchase is focused on US markets. It seems that every one of my Arab friends uses WhatsApp to talk to their families back home (and they use it at home, too). I don't know about other regions.
Some interesting numbers:<p>WhatsApp raised only $8 million (from Sequoia in 2011 <a href="http://www.crunchbase.com/company/whatsapp" rel="nofollow">http://www.crunchbase.com/company/whatsapp</a>).<p>19B sale price is about 10% of Facebook's 173B valuation.<p>At 400 million, WhatsApp has more users than, <i>the world's third most populous country</i>, the United States has residents.
This highlights another of Yahoo's screwups, IMHO. Whatsapp is built by 2 ex-Yahoo employees. Guess what everyone used in the late 90's for messaging? Yahoo Messenger. That's right - I used Y! Messenger all the time to keep in touch with friends before Social Networking was the norm and I'm pretty sure everyone else did too.<p>There is one more company that had the lead in messaging and screwed up - Blackberry. They released their app across platforms, 5 years too late. Had they hit the iPhone/Android apps stores 5 years back, they would have been in a better place than Whatsapp. The funny thing is that their co-founder even wanted to do that and not go after BB10 but he got pushed out.<p>I remember reading that whatsapp's servers basically run using Erlang. Erlang scales massively, and is a beautiful language for messages/telecom etc.. Hopefully, this will trigger some more interest in Erlang.
I usually don't poo-poo acquisitions but this one surprises me for a) the valuation (Facebook really couldn't convince them to exit for 5 or 10 billion?) and b) Facebook really needs to demonstrate that it can get into these markets itself.<p>With all the supposed ingenuity, developer talent, money and existing users, why can't Facebook build anything besides a news feed?
If you have teenager offsprings like me (I've a 13 years old son) you can understand that better maybe. I heard the sentence "We don't need Facebook since there is Whatsapp" an endless number of times from him and his friends. From my point of view at first this didn't made a lot of sense, I considered Whatsapp a no-cost SMS replacement. The reality is that Groups are a killer feature: my son's school class has a group where they share what are the homework for tomorrow, or just send messages that are much alike what you would write on Facebook as status messages. Then I realized that I also created a group for my friends, like, in one group there is me, my wife, and one couple of friends of us where we plan what to do together. In another group there is our family where we share pictures of my daughter. We are using Whatsapp like Facebook as well... Under this point of view this move makes a lot more sense, I believe Whatsapp is eating Facebook traffic.
It looks like Brian Acton, Whatsapp's founder was turned down by Facebook in 2009. What a comeback! This must be even sweeter!<p><a href="https://twitter.com/brianacton/status/3109544383" rel="nofollow">https://twitter.com/brianacton/status/3109544383</a>
A lot of people on HN talk about how Facebook is pointless and on its way out. And it's true, Facebook probably doesn't make a lot of sense to people who are steeped in an email culture.<p>Young adults are <i>not</i>. Facebook is far and away the dominant messaging platform. Email in high school was for spam, communicating with teachers, and passing attachments ONLY. Short, synchorous messages that you didn't mind typing with your thumbs would go via SMS, but more verbose synchronous conversations and email-like async conversations were invariably Facebook Messenger.<p>I can find <i>anyone</i> from my real life that I'm likely to want to talk to on Facebook just by knowing their real name and identifying their face in search results. It's entirely frictionless - no exchanging identifiers or mucking around with pseudonyms. And I can have a conversation synchronously or asynchronously, transitioning seamlessly between devices and modes of communication, with conversation history, read receipts, and delivery confirmation always available.<p>Messaging is a more important part of Facebook than I think much of HN realizes. It makes sense that Facebook would neutralize WhatsApp's threat to its hold on messaging.
Social networking is all about network effects. The biggest threat to Facebook's position at the top of the pile is that another social network will come along, start to gain traction (most likely initially with users that <i>aren't</i> current Facebook users - e.g. early teens) until it reaches a tipping point where current Facebook users start migrating to the new social network because that's where the people they want to interact with are hanging out.<p>Once that tipping point is reached, the migration is likely to happen rapidly and irreversibly. By acquiring companies like Instagram and Whatsapp, Facebook is not only preventing them from usurping its social networking crown but bolstering its own position against future emerging competitors.<p>$19bn might sound like a lot but it's cheap when you consider that the risk of <i>not</i> buying Whatsapp is that it eventually obliterates Facebook in the same way that Facebook obliterated Myspace and the original Bebo.
Maybe I'm not down with the kids, but I'm not understanding what <i>any</i> of these message apps offer over plain old fashioned email. It alerts me on my phone, it works on my computer, it sends to groups, everyone already has it, it sends photos, it stores a history of all my past communications in one place accessible from anywhere. It's not completely secure but at least you don't have to trust any foreign corporation (Facebook, WhatsApp, etc) with your private messages and can run your own server if you like.<p>Also what if Facebook lock your account because they don't like your name, or WhatsApp go bust and shut down in a few years time? Then you've lost everything, because it was locked into their proprietary little system. I don't understand how anyone would chose one of these as their primary method of communication.<p>Especially as they are all newcomers, and email was well established as what the world used to communicate before they arrived. No-one buys a phone and then decides 'Hmm shall I install email or WhatsApp'; no, you buy a phone, you set-up the email account that you've already had for 20 years, and then after that you maybe decide to install another app. This app offers nothing over email, yet you and all your friends abandon email and use the new app instead? That is some powerful marketing they must have done.
Interesting to see that they use Erlang. <a href="http://www.erlang-factory.com/conference/SFBay2012/speakers/RickReed" rel="nofollow">http://www.erlang-factory.com/conference/SFBay2012/speakers/...</a><p>I wonder if this is still valid?
This seems insane. I love WhatsApp, but I recently switched to Google Hangouts because it also supports SMS and I don't really miss it. I don't understand how it can be worth this much when Google has already released a direct competitor to its product that is (and likely always will be) free.
Clearly this is an anti competitive move. Both functionality and users overlap with FB's own products.<p>So, for how long can FB pay billions a year to keep competition out of the market, when the barriers to entry are so low (as Snapchat and Instagram both demonstrated)?
This acquisition is not YouTube or Instagram. This is a peak of the bubble purchase, that will be massively marked down for accounting purposes a few years from now.<p>Smart to buy them? Sure. For $19 billion? Nope.
Personally I prefer Voxer. The requirement of having a phone number on WhatsApp doesn't work for me. I'm constantly traveling and and using different SIM cards in different countries. I'd rather have a single sign-on that doesn't require having to use any phone number.
Interesting to note that WhatsApp had started circulating some overly broad and ill-formed "DMCA takedown" notices a few days back: <a href="https://github.com/github/dmca/blob/master/2014-02-12-WhatsApp.md" rel="nofollow">https://github.com/github/dmca/blob/master/2014-02-12-WhatsA...</a><p><i>By this email, please accept this formal notice and takedown request for the following content on the GitHub site. I am starting with these requests to ensure you will take action on our request. We will have follow-on requests, as the list of infringing content below is not exhaustive.</i><p><i>Specifically:</i><p><i>The following URLs use of the WhatsApp name and logo, use of other WhatsApp content, unauthorized use of WhatsApp APIs, software, and/or services, and provision of software and services related to WhatsApp infringes on WhatsApp's copyrights and trademarks, including those related to WhatsApp's name and logo. WhatsApp's trademarks are registered in the United States and countries throughout the world.</i><p>Note that:<p>• Trademarks aren't subject to the DMCA.<p>• APIs aren't copyrightable.<p>• TOU violations aren't subject to the DMCA.<p>Given that the letter isn't clearly formatted as a DMCA takedown (though it uses some sample language) the effect is ... curious.
Zuckerberg just announced via Facebook profile: <a href="https://www.facebook.com/zuck/posts/10101272463589561?stream_ref=1" rel="nofollow">https://www.facebook.com/zuck/posts/10101272463589561?stream...</a>
In comparison, the Airbus A380 cost $11bn to develop. Is this really wise capital allocation by the street? Imagine what valuable technology could be built with this money. I for one, sold my stock in facebook just now.
Found tumblr posts from sequoia on why Whatapp is great.
<a href="http://sequoiacapital.tumblr.com/post/77211282835/four-numbers-that-explain-why-facebook-acquired" rel="nofollow">http://sequoiacapital.tumblr.com/post/77211282835/four-numbe...</a><p>This is confusing for me though.<p>1. WhatsApp prides on:
No ads
No games
No gimmicks<p>And WhatsApp doesn't collect personal data.<p>Facebook is OPPOSITE of those attributes of WhatsApp.
Even though at the time it seemed ridiculous I could understand paying $1bn for Instagram. Photos is Facebook's most used product and Instagram was stealing users photos on mobile.<p>$16bn for WhatsApp I just can't understand. Facebook has a brilliant messaging app. Lots of people use it - even people who use WhatsApp continue to use Facebook Messenger.
How did WhatsApp gain traction? Presumably most of their users already use facebook, which offers the same messaging functionality as WhatsApp.<p>So why do people use WhatsApp instead of Facebook for messaging?
Of all the companies founded since 2000, these are the following companies that are worth more than $10B: Facebook, LinkedIn, Twitter, WorkDay, and ... WhatsApp.
Am I the only one upset with this? I don't use Facebook - haven't and never will - because I hate how I and all my data will become their product on registration. Sure, Whatsapp has its quirks being proprietary and all, but now, I am basically doomed. Whatsapp says they will stick to their core and stay independent, but I have 16 billion reasons to believe otherwise. The sad part is that due to Whatsapp, I can't escape my doom because EVERYONE I contact daily uses Whatsapp. I would basically kill myself socially if I were to delete Whatsapp. I really, really hope Whatsapp stays Whatsapp but knowing Facebook we are f<i></i>ked either way.
This is definitely a defensive move against Tencent, who is using Wechat as their weapon for global penetration. Tencent must be seen as a threat, given their ability to monetize their userbase drastically better than Facebook or Twitter. There are rumors that Tencent is also a covert investor in Snapchat as well.<p>GGV Partner and China VC Hans Tung makes the argument that Tencent's market cap will overtake Facebook's in 3-5 years.
<a href="http://www.bloomberg.com/video/could-chinese-competition-beat-out-facebook-VFrr1lqDQqSfZeo27dvnvw.html" rel="nofollow">http://www.bloomberg.com/video/could-chinese-competition-bea...</a>
How this negotiation evolves until the point of reaching this sum?<p>Is it like bargaining in the suoq (<a href="http://en.wikipedia.org/wiki/Souq" rel="nofollow">http://en.wikipedia.org/wiki/Souq</a>) ?
I hope they'll convert this abomination into a proper XMPP service. On the other hand Facebook doesn't federate with others anyway, so it's one selfish beast buying another.
$40/user - $345m/employee<p>Truly amazing! If you remember the days when JBoss was acquired by Red Hat, this is the same "value" as one JBoss per Whatsapp employee. Incredible!
For those who're disturbed by this and would like to get away from WhatsApp, the least you can do is delete your WhatsApp account, followed by deleting the app itself. [This does not protect you from WhatsApp transferring all your data to Facebook]<p>Follow the instructions for your device to delete your WhatsApp account:<p>iPhone - <a href="http://www.whatsapp.com/faq/iphone/21325453" rel="nofollow">http://www.whatsapp.com/faq/iphone/21325453</a><p>Android - <a href="http://www.whatsapp.com/faq/en/android/21119703" rel="nofollow">http://www.whatsapp.com/faq/en/android/21119703</a><p>BB10 - <a href="http://www.whatsapp.com/faq/en/bb10/28020005" rel="nofollow">http://www.whatsapp.com/faq/en/bb10/28020005</a><p>Windows Phone - <a href="http://www.whatsapp.com/faq/en/wp/21335316" rel="nofollow">http://www.whatsapp.com/faq/en/wp/21335316</a><p>Nokia - <a href="http://www.whatsapp.com/faq/en/nokia/21477616" rel="nofollow">http://www.whatsapp.com/faq/en/nokia/21477616</a><p>Blackberry - <a href="http://www.whatsapp.com/faq/en/bb/21306771" rel="nofollow">http://www.whatsapp.com/faq/en/bb/21306771</a><p>---<p>Also, Telegram is wicked fast in my personal experience. I see a trickle of people joining Telegram over a period of time (well before this acquisition).
The simple issue is that Facebook is the one that is overvalued, not WhatsApp. I'm sure it was mostly paid for in stock.<p>If you don't think Facebook is overvalued, that's fine, but you can't complain about WhatsApp then.<p>Also, I doubt this reduced Mark's control of Facebook. Just his common share equity. He still has the special class of voting shares that I'm sure all he really cares about.
I read all the comments, the whole time thinking about how crazy this number is.<p>I read why people use it, because it is cheaper (free?) than the ridiculous pricing of SMS.<p>So, I looked up the revenues generated by SMS, and it is estimated to be, according to a very cursory search:<p>150 Billion USD per year<p>This is the number that Facebook is using to compare their offer against. It is not crazy if they can capture even a few percent of that money.
A well-written article which traces the lives of Jan Koum & Brian Acton in some detail<p><a href="http://www.forbes.com/sites/parmyolson/2014/02/19/exclusive-inside-story-how-jan-koum-built-whatsapp-into-facebooks-new-19-billion-baby/" rel="nofollow">http://www.forbes.com/sites/parmyolson/2014/02/19/exclusive-...</a><p>Koum : “I want to do one thing, and do it well.”
16B? That's a B, people. While there are a lot of whatsapp users (and people have to pay to use it), wow, that's still a lot of money! How can they justify revenue that way? How can any company ever consider such acquisition? I don't even think Google can even make 16B like this.<p>See this discussion: <a href="http://www.quora.com/WhatsApp-Messenger/How-much-revenue-is-WhatsApp-generating" rel="nofollow">http://www.quora.com/WhatsApp-Messenger/How-much-revenue-is-...</a><p>$20M net revenue, at most, right? With future expansion and side commercial services, I make $1B per year, fine. But that's after tax. So WhatsApp must make A LOT more than $1B. I really don't see anything else. But that's only when WhatsApp can continue to grow and actually gain that much of commercial income. Someone who have dealt with acquisition tells me how 16B is the right number. I would pay $5B just because WhatsApp is well-established.
This is Sequoia's blog post. It was enough to make me slightly overcome my complete shock at the valuation ...
<a href="http://sequoiacapital.tumblr.com/post/77211282835/four-numbers-that-explain-why-facebook-acquired" rel="nofollow">http://sequoiacapital.tumblr.com/post/77211282835/four-numbe...</a>
From the press release[0]:<p><pre><code> "... and WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications."
</code></pre>
Why is that, I wonder. I was really excited when I heard the news since WhatsApp is the most used app and Facebook Messenger is the second, they becoming one would have been nice.<p>And chatting my friends on WhatsApp using Facebook Messenger [on the web] would be a killer feature for me, I feel the need for a web interface/desktop app every time I receive a message on WhatsApp and my phone is away.<p>[0] <a href="http://newsroom.fb.com/News/805/Facebook-to-Acquire-WhatsApp" rel="nofollow">http://newsroom.fb.com/News/805/Facebook-to-Acquire-WhatsApp</a>
I am speechless....<p>Even if I apply all my knowledge about valuation, product market fit, historical knowledge and add a glass is half full attitude to this acquisition I can't fathom that evaluation.<p>Then I think about instagram selling for "only" 1B and it kind of make sense. Kind of...
Could someone explain to me why WhatsApp is more popular then say Skype or any of the numerous competitors. I looked at it for the first time today. I find the design of the app to be a bit poor, at least on iOS6. Overall it's a good app that functions well, from what I can see. But so does Skype, for instance. Also, the lack of a PC/MAC client is kind of a letdown.<p>I know it's silly to argue with facts, clearly people really like this app. But could someone explain to me why? I mean, how is it better than Fring, or Skype, or Viber? Or is it just luck? I am curious because if they did something right, I would love know what it was, so I can do it too :)
Like many people, I found the price staggering. However, given that WhatsApp is growing and may pass FB in active users in the next 2-3 years AND WA has a great monetization strategy... It's not crazy to think that in a few years 1B people would be paying $1 per year. Want to double revenues? How 'bout $2/year. $5? $20 in US and other first world markets, $2 in developing countries? Why not? In addition to the defensive move, this is about disrupting a multi hundred billion dollar wireless industry. I wouldn't have had the guts to do it, but I don't think Zuck is stupid.
They recently did 54B messages in a 24 hr period
<a href="https://twitter.com/WhatsApp/status/420373902980689920" rel="nofollow">https://twitter.com/WhatsApp/status/420373902980689920</a>
Damn.<p>I know Whatsapp is a big deal -- when I was in HKG a few weeks back every advertisement was Phone Number and Whatsapp number (We're talking on-bench advertising) and on TV as well.
Still, crazy.
It's a crazy amount to pay, but in mobile software only 2 things really matter - Photos and Messaging. These are the only 2 things that are universal to every single person on this planet who owns a mobile device and if you want to be #1 overall in the mobile space, you need to win in these 2 things.<p>If this guarantees FB winning the messaging war, then it's worth it. I still think that Facebook needs to buy SnapChat, Line and WeChat to close the deal and fulfill their dream of connecting the world.
Mark Zuckerberg is most certainly very intelligent and I'm pretty certain his board is highly capable.<p>If they are ready to pay $ 16B for WhatsApp it means that it's worth, for them, $ 16B.<p>For me the take away is that Facebook struggles to grow in "underdeveloped" countries and will pay whatever it takes to make sure these zones are easy to conquer.<p>Those markets are the growth of tomorrow and Facebook is certainly plateauing at home.<p>In the long run, I think Facebook will become some sort of shell company for "anything social".
As I tweeted this morning: <a href="https://twitter.com/dan_hopwood/status/436411010212454400" rel="nofollow">https://twitter.com/dan_hopwood/status/436411010212454400</a><p>WhatsApp is to messaging what PayPal is to payments. Right product, right time. Slow design iteration & little innovation over time. But as we've seen, it hasn't mattered. Stripe, Line, WeChatApp know all too well that moving off <i>such</i> established players is tough.. but not impossible.
Now facebook will access to my contact list :( It is really difficult to remove Whatsapp as it the primary communication tool for most of my network. Really sad news.
Disney is valued at $103B. That includes ESPN, parks, cruises, Star wars, movies, merchandise, etc etc etc. So how's What's app is 1/5th of it?
Can anyone put in numbers what the benefit is for FBK in paying so much for whatsapp? I just don't understand how a messaging company can be "worth" so much, even after extrapolating the expansion in user base.<p>Don't get me wrong - WhatsApp is a great product and very easy to use on top of that (using phone number as id is a great idea to onboard users in a very intuitive way). But I fail to see where this valuation is coming from.
Makes perfect sense if you put it into the context of what is happening to other messaging apps. Wrote this a few days ago before Viber and now this acquisition.
<a href="http://www.hoista.net/post/76404923258/the-rise-of-trojan-horse-platforms-kakaotalk-wechat" rel="nofollow">http://www.hoista.net/post/76404923258/the-rise-of-trojan-ho...</a>
Anyone else think the "users" obsession smells an awful lot like the "eyeballs" obsession?<p>Oh but these companies have revenue? WhatsApp and Snapchat have no meaningful revenue in comparison to their valuations. And the companies with revenue, are being valued at insane multiples (infinity for Twitter, 85 to 100 times for Facebook, 800 or so times for LinkedIn).
In order to keep up FB's stock valuation the need to show continued growth which slowing at a vary rapid rate. WhatsApp is adding 1 million new users per day. That's what zuck bought. And the ROI? Will be the market applauding FBs growth and driving the stock price to $100.
How many active users does WhatsApp have? I'm trying to put this in perspective with the Instagram purchase and the Snapchat offer... finding it very difficult to understand the math behind this acquisition, although it is obviously linked to the recent plays with Messenger.
Facebook going to mobile operator business. They have very good relationship with Microsoft. Microsoft has mobile platform and Nokia and Skype. I think FB + MS will create something to change whole telecommunication platform. Many mobile operator companies afraid that.
I think I will nominate myself to be the single person on Hacker News, who after an announcement of a huge mega-acquisition, will skip all the high-minded analysis and discussion of business models and ROI, and simply say:<p>Wow, I wish I had a $19B acquisition -- I'm jealous :-)
WhatsApp has become the defacto medium of communication with my friends and family in Africa, emerging way ahead of phone numbers, sms, facebook et al. I am not thrilled by the service, but if you want to stay in the loop, you have to join the bandwagon.
Instead of stating the obvious, or hating, and congratulating, it would be nice to hear your thoughts on the value of this deal, what FB will gain, where do you see the IM space heading, could this be a Youtube like acquisition, etc...
Wow, thats an incredible return on a $8m sequoia investment<p><a href="http://techcrunch.com/2011/04/08/sequoia-whatsapp-funding/" rel="nofollow">http://techcrunch.com/2011/04/08/sequoia-whatsapp-funding/</a>
Facebook is barely 10 years old and they're already the new Microsoft...maintaining dominance by acquiring every major competitor that poses a threat. And I'm not necessarily saying that's a bad thing.
This tech bubble is different.<p><a href="http://www.businessweek.com/magazine/content/11_17/b4225060960537.htm" rel="nofollow">http://www.businessweek.com/magazine/content/11_17/b42250609...</a>
The question here is where do FB see the value? Is it a pure defensive play about messaging or are they after the social graph you could extract (along with a lot of other juicy data) from the WhatsApp DB?
You know we all know and feel the same: <a href="http://vmavalankar.svbtle.com/why-facebook-bought-whatsapp" rel="nofollow">http://vmavalankar.svbtle.com/why-facebook-bought-whatsapp</a>
What is WhatsApp? I saw the name somewhere before, maybe on HN, but who are they that they can command a price in the billions? Isn't it a messaging app? Why isn't Pidgin worth $16 Billion?
A few thoughts..<p>I'm sure like many, I'm blown away at that price tag consider Motorola went for 12B and the recent TWC/Comcast is valued at 45B with both having hard assets. But after some reflections, I can see some positives that grounds my disbeliefs a bit.<p>1) As someone has already calculated $40/user is really not that bad (though how many overlap with fb already?)<p>2) You have trusted groups with WA, something you don't really have with FB (facilities are there but I doubt many use it).<p>3) With trusted groups, you tend to be a bit more open about your dialog so fb could gleen yet more, arguably better, information about you.<p>The other question in my mind are what other features are of value to WA? Video (facetime-esq) seems like a no brainer...
It'll be interesting to see if we still have as many Whatsapp-type apps in future. It seems like there's already quite a few... WhatsApp... WeChat... Line... Kakaotalk...Viber...
What does WhatsApp offer that regular old text messages don't?<p>Is it just a price thing?<p>I can group chat, send images, and send video with everyone, even people with dumbphones just fine using text messages (MMS).
Aaand WhatsApp is down... on Saturday night (GMT+1). Chaos looms over Spain as we can't remember when was the last time we used anything else to send plans for tonight.
One can only wonder how many services or products that provide true value and innovation around the world could have been created with that much money instead...
Stupid question but will "existing" whatsapp users have to use their/create a new facebook account to use whatsapp starting in a few months?
what makes whatsapp so attractive already ?<p>I don't understand how it really avoid the SMS cost... I mean you can't have a data plan across the entire world...
they dont buy the users or the app or the team. What they buy is massive mobile usage. Lately i always thought that Whatsapp was becoming the next facebook as event planning, foto sharing and of course messaging transitioned from fb to whatsapp. Looks like fb thinks the same, they feared whatsapp.
crazy to think WhatsApp is worth almost as much as Netflix or Tsla. I think they overpaid. Will short the stock at open tomorrow. I was long $25 to $55, but this kind of recklessness with a young management team is destroying shareholder value.
This is just sick. Does at least some tax apply to such transactions in the US?<p>Or think what the Gates Founation woul dbe able to do with just, say, a quarter of this money.
Maybe part of it is for the data on WhatsApp users.<p>* "In the event that WhatsApp is acquired by or merged with a third party entity, we reserve the right to transfer or assign the information we have collected from our users as part of such merger, acquisition, sale, or other change of control." [they go on to say that they may not be able to control use of information in cases which include "reorganization"]
<a href="http://www.whatsapp.com/legal/" rel="nofollow">http://www.whatsapp.com/legal/</a><p>Still seems ridiculously expensive.
I think this one will be the turning point for Facebook, remember that M & A in the corporate world have history of senseless and expensive moves that end up bankrupting the company who buy it, $40 per user is an extremely risky bet when Facebook themselves can't even monetize it's own userbase. This appears to be a road to become as big as possible so that you can't possibly appear to fail when faced with companies like Microsoft, Google, Yahoo who are after profitability aligned with their own products.