Facebook Purchases WhatsApp for $16 Billion

[starklenx]

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg.

You just paid $19 per free sign up*1,000,000,000.

Good luck earning a return from people unwilling to pay 10 cents for a text message.

You simply dont get the gigantic opportunity having 1 billion users create. You can manipulate growth, you can manipulate smily faces to your investors, you can keep your funding coming.

For facebook it was just stucked cash. Its a 170B company.

Imagine if they monetized hard bla bla, make users unhappy, make investors happy and eventually collapse the platform.

Now instead they pretend beeign friendly and slowly but steadily present revenue growth.

PRO's imho. :bowdown:

 

[Fatbat]

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg.

You just paid $19 per free sign up*1,000,000,000.

Good luck earning a return from people unwilling to pay 10 cents for a text message.

Yeah, because that's the revenue model that they're going for. First of all, people pay $1 a year to use the service after their first free year. Then, as most have pointed out, it's going to certainly be about the advertising, cause, you know, that's how Facebook makes its money. If you've got a billion people using your product on a regular basis, that's worth a few bucks, especially when the value of a user is often measured in hundreds, if not thousands, of dollars.

I'm sure they crunched a few numbers and knew what exactly they were getting into before they threw down 19 billion and didn't just enter into the deal all willy nilly.

 

[Scococo]

No one in the first world uses whatsfap.
There are plenty of alternatives.
Never going to generate a $1.5bn dividend straight off the bat.
Industry with a very high failure rate.
Long term upside isn't there.
Untested model.
Shrinking market if it manages to survive long term.
Blady blah blah.

Just as well they paid the bulk in Facebook shares as that's the only company with a greater overvaluation than whatsapp.

 

[dmnEPC]

No one in the first world uses whatsfap.
There are plenty of alternatives.
Never going to generate a $1.5bn dividend straight off the bat.
Industry with a very high failure rate.
Long term upside isn't there.
Untested model.
Shrinking market if it manages to survive long term.
Blady blah blah.

Just as well they paid the bulk in Facebook shares as that's the only company with a greater overvaluation than whatsapp.

One of my HK suppliers just turned me onto whatsapp
And wechat. There is serious international buisness being transacted on these apps.

 

[Ibanez | Jan]

No one in the first world uses whatsfap.

Source?

There are plenty of alternatives.

Lots of social networks alternatives around as well.

Industry with a very high failure rate.
Untested model.

That's why they bought a working app with a fucking huge userbase instead of trying to get their own mobile messenger off the ground.

Long term upside isn't there.

Well we don't know what FB is going to do with the data. Maybe using it in a way Google uses Gmail for their ad targeting? That's worth a lot.

Shrinking market if it manages to survive long term.

Why so?

14bn is a lot, but I doubt that they came to that number after rolling a pair of dices.

 

[Fatbat]

No one in the first world uses whatsfap.
There are plenty of alternatives.
Never going to generate a $1.5bn dividend straight off the bat.
Industry with a very high failure rate.
Long term upside isn't there.
Untested model.
Shrinking market if it manages to survive long term.
Blady blah blah.

Just as well they paid the bulk in Facebook shares as that's the only company with a greater overvaluation than whatsapp.

You can't even say the name of the app without calling it something stupid? How old are you? So many people in Europe are using WhatsApp. Everyone I know here in Spain and Gibraltar is. Man on the street video from the UK... BBC News - WhatsApp users on what they like and dislike about the app "Nobody uses text anymore. Everyone uses WhatsApp, because EVERYONE has WhatsApp". "I use WhatsApp to talk to my friends, I use it every single day". Etc, etc.

You might want to get out more man, and don't be so butthurt. I'm sure you'll come up with a good idea someday.

 

[Scococo]

Source?

Most people in the first world have mobile contracts. And although they haven't given out demographics, everything about whatsapp points to the Asian market.

Lots of social networks alternatives around as well.

False equivalency.

That's why they bought a working app with a fucking huge userbase instead of trying to get their own mobile messenger off the ground.

Bro, go easy on the F-bomb.

Well we don't know what FB is going to do with the data. Maybe using it in a way Google uses Gmail for their ad targeting? That's worth a lot.

One attraction of technology firms is growth. A 19bn valuation is top dollar. If top dollar was code for batshit crazy.

 

[Pulse]

Even for Facebook, that's a staggering amount to pay for a company with estimated 2013 revenue of only $20 million. It represents almost 10% of Facebook's overall value — for a "messaging app."

source

Not saying Facebook can't monetize it more effectively and leverage the traffic, but really...$19B for an app that made ~$20M in 2013.

 

[JulianTrueFlynn]

source

Not saying Facebook can't monetize it more effectively and leverage the traffic, but really...$19B for an app that made ~$20M in 2013.

It's only a PR6 too, Facebook got majorly screwed on this one guys.

 

[Scococo]

You can't even say the name of the app without calling it something stupid? How old are you? So many people in Europe are using WhatsApp. Everyone I know here in Spain and Gibraltar is. Man on the street video from the UK... BBC News - WhatsApp users on what they like and dislike about the app "Nobody uses text anymore. Everyone uses WhatsApp, because EVERYONE has WhatsApp". "I use WhatsApp to talk to my friends, I use it every single day". Etc, etc.

You might want to get out more man, and don't be so butthurt. I'm sure you'll come up with a good idea someday.

Ahhhh, so someone interviewed people in the street and few used whatsapp?

Damn. I was wrong. It IS worth 19bn.

Oh god, so selective, so dumb.

 

[Fatbat]

Most people in the first world have mobile contracts. And although they haven't given out demographics, everything about whatsapp points to the Asian market.

So, what you're saying is, you don't really know what you're talking and are just pulling opinions out of your ass. That clears things up.

You're missing the point and clearly don't know how WhatsApp even works. This isn't SMS text messaging, it offers more, for less. As far as the demographics go...

"At one point or another, it’s been the number one paid app in 131 markets globally. With over 450m users around the world, the volume of messages sent on it every day exceeds the total number of SMS messages sent globally. It’s big."

"Its growth has been nothing short of spectacular. According to Onavo Insights, over a third of UK iPhone owners have it on their device. In Spain, that number is a staggering 97%." (yeah, nobody in the west is using it

From this article, written March 2013... The inexorable rise of WhatsApp (Updated) | MHP Corporate

 

[Fatbat]

Ahhhh, so someone interviewed people in the street and few used whatsapp?

Damn. I was wrong. It IS worth 19bn.

Oh god, so selective, so dumb.

Never mind first hand user's testimonials, any idiot can look at the numbers that have been reported and see the value. Why can't you? Why are you so butthurt?

 

[Ibanez | Jan]

Most people in the first world have mobile contracts. And although they haven't given out demographics, everything about whatsapp points to the Asian market.

False equivalency.

Bro, go easy on the F-bomb.

One attraction of technology firms is growth. A 19bn valuation is top dollar. If top dollar was code for batshit crazy.

Ahhhh, so someone interviewed people in the street and few used whatsapp?

Damn. I was wrong. It IS worth 19bn.

Oh god, so selective, so dumb.

I tried to write something for 10 minutes to address your points, but I gave up.
This is beyond stupid.

So here's a visual representation of your writings:

 

[rusvik]

WhatsApp is popular here in Thailand, though there are already others like Line and now WeChat for the younger crowd looking for new fads.

It's correct that WhatsApp is popular because Asians are generally too poor to pay for a proper data package.

What you have to consider is that they are all getting richer. The infastructure to buy online isn't even really there in countries like Thailand, Indonesia etc, but it will at some point.

A country like Thailand doesn't have the same regulation about ads on phones. I get spammed with calls and txt messages all the time.

With WhatsApp you have a huge userbase of young tech savvy people in developing countries. I can definitely see the value in that once they take the next step towards becoming real first world countries like Korea did.

 

[User9364]

But that isn't a problem as these users won't ever need to be on the Facebook platform for Facebook (the company) to profit from them. It's like someone who hates Coke drinking Sprite. The money's going into the same pockets either way.

My point is that once they learn Facebook bought WhatsApp, they'll see the writing on the wall and be on to the next chat program... maybe called NotFacebook. Instead of brand loyalty... what we have here is brand disloyalty toward facebook.

Your analogy doesn't quite fit that.

 

[JulianTrueFlynn]

My point is that once they learn Facebook bought WhatsApp, they'll see the writing on the wall and be on to the next chat program... maybe called NotFacebook. Instead of brand loyalty... what we have here is brand disloyalty toward facebook.

Your analogy doesn't quite fit that.

I haven't read up enough on this but is FB keeping all the WhatsApp staff? People were worried a lot about Yahoo taking over Tumblr and killing the freedom but traffic hasn't died at all. Not the same exact scenario though.

This is just me but I think Yahoo has a bigger touch of death than FB. I don't think FB will struggle to keep the users if people love the product.

 

[Scococo]

WhatsApp is popular here in Thailand, though there are already others like Line and now WeChat for the younger crowd looking for new fads.

It's correct that WhatsApp is popular because Asians are generally too poor to pay for a proper data package.

What you have to consider is that they are all getting richer. The infastructure to buy online isn't even really there in countries like Thailand, Indonesia etc, but it will at some point.

A country like Thailand doesn't have the same regulation about ads on phones. I get spammed with calls and txt messages all the time.

With WhatsApp you have a huge userbase of young tech savvy people in developing countries. I can definitely see the value in that once they take the next step towards becoming real first world countries like Korea did.

This pretty much sums up the typical whatsapp core userbase.

Personally I think it's unrealistic to think the app will relevant for long enough to see the developing world progress. Regardless, the point is moot as an average user with spare cash wouldn't bat an eyelid to pay for a text/contract.

 

[gbmack]

snapchat was a stupid fucking purchase (user base will not last), but this? this is smart. huge user base that is going to stay. good on you zuckaberg. if i were suckaberg, i would immediately plaster free trial CPA offers all over snapchat's interface for the $100k/day lulz

 

[Fatbat]

My point is that once they learn Facebook bought WhatsApp, they'll see the writing on the wall and be on to the next chat program... maybe called NotFacebook. Instead of brand loyalty... what we have here is brand disloyalty toward facebook.

You make it sound like Facebook is dying. It's not. 1.3 billion users up from 1.1 billion in March 2013. There are approximately 2.5 billion people online in the world, with new people coming online all the time. This means Facebook has pretty much half of them as customers (even if they're teens pretending they're not) with rather extensive data about all of them, and it is growing. What other company can say that? Facebook is valued at around 170 billion. That's a value of about $130 per user. If WhatsApp hits 1 billion users, and they can put a valuation anywhere near that on those users, then they're laughing.

 

[User9364]

I haven't read up enough on this but is FB keeping all the WhatsApp staff? People were worried a lot about Yahoo taking over Tumblr and killing the freedom but traffic hasn't died at all. Not the same exact scenario though.

This is just me but I think Yahoo has a bigger touch of death than FB. I don't think FB will struggle to keep the users if people love the product.

The difference here is that I don't think people escaped Yahoo to go to Tumblr in the beginning. (I could be wrong.)

It seems widely accepted that the teen demographic fled facebook to go to WhatsApp. I expect they'll be offended that FB is trying to rebuy them.

Now maybe they were just getting away from their parents and not FB, but FB can screw up here... for instance, trying to integrate the two.

This is all just trivia for me, but it will be interesting to see what happens.