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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

#392

Post by tomkarlo »

the_watcher wrote: post #291
tomkarlo wrote: post #282

Earlier quoted context omitted.

At 400M users, how much more are they really going to grow? Maybe 2-4x. They're at a point where they're almost bounded by the number of people on earth with mobile devices.

Well, given that there are roughly 7 billion people on earth, and the number with mobile phones is currently 4.3 billion, that means WhatsApp is at 9% penetration of a still growing market. I think they can grow a little bit more than you estimate, and regardless, 4x of 400mm is an increase of 1.2 billion users.

There's only about 1bn smartphone users, of which Whatsapp probably has 45% penetration, and some other large percentage are on competing platforms. Yes, that 1bn is growing, but it's also moving into market segments with much lower income levels. Even if we think this is going to increase 4x that probably doesn't justify a 12X sales valuation.

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

#393

Post by tomkarlo »

antrix wrote: post #313
tomkarlo wrote: post #249

Earlier quoted context omitted.

Not sure how you're figuring that. At best - 1.5Bn users locked in - you're at less than $1bn _revenue_ (after you net-out the 30% that goes to Apple or Google for an in-app transaction) and much lower net profits (presumably, it costs some fraction of a dollar in ops, bandwidth and cpu to support a paying user for a year.) Also, even at $1bn in revenue, this is 16X sales... that's usually the kind of price you'd see…

> and you're capped at $1 per year per user Why would that be the case? There are always other revenue streams to be explored using the same user base.

Maybe, but they're also entirely speculative. We can only evaluate the price based on the business they have, not imaginary alternate revenue streams.

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

#394

Post by pbhjpbhj »

qq66 wrote: post #314
malandrew wrote: post #67

Earlier quoted context omitted.

Better yet, how do we get people to move to something distributed so that Facebook (or Google or anyone else) cannot acquire the service. If we just move to another decentralized messaging service, that service will eventually get gobbled up as well, and we'll have to rinse and repeat.

There's no such thing as a decentralized conmunications tool. Even email requires the centralization provided by ICANN.

You can send email without using DNS.

I'm not sure I'd call IP addresses centralised, if perhaps you were thinking of ICANN's running of IANA?

If you consider the internet inherently "centralised" then surely you'd still find CB radio or similar to be decentralised. Or do you also consider the allocation of wavebands to be "centralised"?

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

#395

Post by adventured »

smackfu wrote: post #388
adventured wrote: post #304

Earlier quoted context omitted.

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 dotc…

Heh, AOL bought ICQ for $287 million, and it had 12 million users. $24 per user. Now AOL was really good at destroying companies though...

I agree re: AOL destroying value. I think It was $400m total, and keep in mind ICQ was ten times that size three years later (less than $4 per user at that point). I doubt we'll wake up to WhatsApp being at 4 billion users in 36 months.

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

#396

Post by hrayr »

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…

I believe the majority of WhatsApp users are non US, Facebook may be trying to expand further into that market. It's also possible Facebook saw WhatsApp's growth as a major threat if another major player were to acquire them first.

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

#398

Post by curun1r »

yapcguy wrote: post #340
dba7dba wrote: post #222

Earlier quoted context omitted.

CEO of Whatsapp prided on not listening in private conversation or collecting personal data, which Facebook ACTIVELY does.

The CEO just had a higher price than most other people. To get $16bn cash from Facebook is hilarious. Next time a start-up says they won't pay you market rate because of x, y, and z just walk away and laugh. For the sake of a few thousand dollars in wages, you could make them billions. Don't work for cheap bastards. Funny how engineers are supposed to sacrifice yet we never see a lawyer or accountant charge below mar…

WhatsApp is actually the reason why people accept less than market rate from startups. No WhatsApp employee who's been there more than a year will ever need to work again once he/she survives the "golden handcuffs" period.
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