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Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

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Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#301

Post by ulfw »

pitchups wrote: post #131
nwh wrote: post #60

400,000,000 active users [0] 16,000,000,000 USD ---- $40 per user 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. > WhatsApp will remain autonomous and operate independently. You can contin…

Pretty amazing that this is precisely what Microsoft paid for Hotmail in 1998 : $400 million for 10 million users = $40 / User. [1] The parallels are striking : Whatsapp is to messaging today what Hotmail was to messaging in the late '90s. [1] http://news.cnet.com/2100-1033-206717.html

Hard to compare though. Microsoft had barely any internet/web users back then. They had zero email users. Facebook has a billion or so give or take. All of which can get Facebook messages in their mobile apps already. How much overlap is there with Whatsapp?

Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#302

Post by abc_lisper »

frandroid wrote: post #267
abc_lisper wrote: post #172

Earlier quoted context omitted.

I can't believe it either. Few miles from FB and Whatsapp is Tesla, people consider it massively overvalued at 25Billion. It is almost laughable. When you are a compulsive liar, people catch up to it, and you will all live in a lie world. This is very close to how Ponzi schemes work. Billion is a lot of money. Since FB lied through their teeth, considered themselves demigods and levied idiot tax on poor investors, it…

What lies are you talking about?

I view FB as a very dishonest company. Here are my reasons.

1) Hiding stuff from users, stuff that is personal to users and putting it for sale. It is not like they make it easy to change options either.

2) Mark said on more than one occasion that he wants to make the world a open place. His actions don't reflect it. Remember, the one time somebody hacked into his FB account(or somehow got access to pics) and posted his personal pics, and FB was not too pleased about it. There was even a press release about respecting his privacy(!!).

3) Not too long ago, FB made ties with Republican faction for H-1B visas. Not too wrong with it(I am on H-1B myself), but they supported a Republican bill that has to do with environmental protection(went against it), to gather support for H-1B visas. It's almost like they would go to any lengths to get their stuff done. I find it hard to believe they(FB) have idealistic goals.

Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#303

Post by dkasper »

notahacker wrote: post #149
psbp wrote: post #75

Earlier quoted context omitted.

Or facebook is trying to trivialize and destroy the startup market.

Destroy? There will be a host of new messaging startups created off the back of this, and suddenly the Snapchat valuation looks sane. Do one thing that Facebook does but better is the new gold rush. Sure, most of them will fail hard without raising a cent in revenue, but others will start to threaten to chip away at Facebook's market share.. Anecdata: I get a lot more messages on FB messenger than WhatsApp...

To be fair doing startups with the goal of getting acquired by FB has been a thing for a while.

Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#304

Post by adventured »

staunch wrote: post #170

Damn, Zuck is far 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! I actually think it wasn't such a bad idea to buy Instagram. He paid 1% for something that really could have killed him. But paying $16 billion here is pretty much surrender as far as I'm concerned.

Zuck should probably be fired (gracefully step-aside, courtesy of shareholder activist pressure, given his voting control) when Facebook is forced to do a $16 billion write-down on this. WhatsApp won't even be worth the cash they're paying for it when the music stops. They just bought today's version of ICQ for $19 billion. This acquisition leads me to believe Facebook is most similar to Yahoo at the peak of the dotcom bubble (the acquisition strategy, the massive overvaluation, the weak advertising platform). Yahoo was a portal, Facebook is the same premise but in social networking (the all-in-one champ). There will probably be pieces that spin out of the social networking scene that end up producing the next Google, while FB languishes as the new Yahoo.

Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#305

Post by ulfw »

Nicholas_C wrote: post #118
mathattack wrote: post #94

Earlier quoted context omitted.

I don't think they're buying it per current user. It's either about paying for future users (granted, triple the user base and it's still a lot) or a game of defense against a potential competitor. They bought the photo company at what seemed an outrageous amount in part to co-opt a competitor. In the end it was profitable. They alter their feed to look more Twitter-like, encouraging people to avoid the competitor. I…

>They bought the photo company at what seemed an outrageous amount in part to co-opt a competitor. In the end it was profitable. Are you talking about Instagram? Unless I've been living under a rock I haven't heard or read anything that says they're profitable.

Plus they didn't even cost 1 Billion. Chump change.

Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#306

Post by samstave »

adventured wrote: post #213
sheetjs wrote: post #128

Earlier quoted context omitted.

Try this: FB market cap ~170B .75B users (EDIT: originally quoted FB 1.2B users, but that is the total count and WhatsApp quotes active users) --> market cap implies roughly $225 per active user. In that light, 40/AU is cheap. Even if you assume 50% overlap, 80/AU is still a deal compared to how the market values FB users

Except Facebook is now generating a serious quarterly profit, which contributes massively to their underlying valuation. There's no hope of WhatsApp ever justifying this purchase price, not even remotely close. Facebook shareholders just got screwed massively. This deal will be written down in a big way. Zuckerberg threw a dart at the board out of desperation.

Zuck:

http://i.imgur.com/GoA3NSp.jpg

Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#307

Post by ulfw »

jamra wrote: post #255
nwh wrote: post #60

400,000,000 active users [0] 16,000,000,000 USD ---- $40 per user 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. > WhatsApp will remain autonomous and operate independently. You can contin…

Maybe they're not just paying for users. Maybe they're paying for the strong infrastructure of the messenger and the talent associated.

And what's the point of it? They already have a working push messaging infrastructure for 1+ Billion people.

Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#308

Post by qqg3 »

Silhouette wrote: post #260
gms wrote: post #61

Earlier quoted context omitted.

Don't feel bad; no one really uses them in the US (except us foreigners to communicate with friends and family abroad). They are the de-facto messaging service in the rest of the world (except for China).

They are the de-facto messaging service in the rest of the world (except for China). FWIW, I'm in the UK, and I'm not aware of anyone who uses it here, either. I too have heard the name mentioned once or twice in the past, usually for undesirable reasons related to things like security or privacy. Even looking them up today, I don't quite see the attraction: what is the USP here?

Bullshit, I'm in the UK, everybody I know uses WhatsApp.

Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#309

Post by ulfw »

rikf wrote: post #288
jamra wrote: post #255

Earlier quoted context omitted.

Maybe they're not just paying for users. Maybe they're paying for the strong infrastructure of the messenger and the talent associated.

You get a hell of a-lot of R&D, talent infrastructure and pretty much anything for $16B think Facebook with its engineering talent would find it fairly trivial to replicate the tech. The big consumer internet acquisitions are very rarely about the technologies and more about the installed user base.

Plus other similar apps like Wechat, Line etc are more advanced.

Re: Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs

#310

Post by nilkn »

bedhead wrote: post #64

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.

To be fair, WhatsApp has an incredible number of very active users. It's not like the companies in 1998/99 which had no revenue, no users, but spent millions on Super Bowl ads.

That said, this is a staggering amount to pay. I'm not familiar with Facebook's financials, but I'm surprised they could even afford this. I'd chalk this up to Zuckerberg's paranoia about no longer being #1 and less to a bubble.

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