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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

#441

Post by sentenza »

myzerox wrote: post #263
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…

They're buying access to a winner-take-all market.

Remember when we had standards and interoperability?

Why would messaging be a winner-take-all market? I mean, it's just pushing around a bunch of bytes. Shouldn't be too difficult to specify.

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

#442

Post by crucialfelix »

virjog wrote: post #239
my_username_is_ wrote: post #221

Earlier quoted context omitted.

That's amazing. It can be easy to write off WhatsApp with an ethnocentric view, but to hear how other people are using it on the other side of the world certainly adds a new perspective

Same thing with the diamond merchants in India. A lot of deals and much of the communication is now done over WhatsApp. People in India get a smartphone for the sole reason to use WhatsApp, whether the individual is a servant or a rich businessman.

Also I noticed these Tata "WhatsApp data packs"; so they did partnerships directly with mobile providers. 30m actives in India.

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

#443

Post by hatred »

soperj wrote: post #362
olegious wrote: post #243

Earlier quoted context omitted.

Android users pay an annual fee.

how on earth do they charge it if you don't have a credit card associated with your play account? Because I've used whatsapp for well over a year and can't figure out how they'd charge me.

Well , I did have to pay once. Your watsapp just stops syncing until you pay via Play.

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

#444

Post by highCs »

adventured wrote: post #434
highCs wrote: post #411

Earlier quoted context omitted.

400,000,000 active users [0] 16,000,000,000 USD 10 years ---- $4 per user and per year

What if they have 40 million users in ten years? And never generate a dime of serious profit in the meantime. Remind me what AOL Messenger, MSN Messenger, ICQ, Yahoo messenger, are worth today.

I notice a difference: facebook acquires other social networks and seems to be enough big to sustain that.

What if they have 40 million users in ten years? And never generate a dime of serious profit in the meantime.

Then it would be a net loss. But 3B loss for a possible 1 billion customers sustainable business is not huge.

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

#445

Post by oaktowner »

panarky wrote: post #173
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…

$40 per user is roughly inline with the $3B Facebook was prepared to pay for Snapchat (though we don't have precise numbers on Snapchat MAUs). This is another defensive move. Hundreds of millions of people sharing rich media in realtime on non-FB services is a genuine threat. It's really a direct result of smart mobile devices. Facebook used to own the user's contacts, but now independent apps have direct access to d…

> Hundreds of millions of people sharing rich media in realtime on non-FB services is a genuine threat.

Yup, I agree entirely. This wasn't about getting new users, it was about getting the content to run across their services.

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

#446

Post by nousernamesleft »

the_watcher wrote: post #295
hackinthebochs wrote: post #184

Earlier quoted context omitted.

I conjecture that this price is a reflection of the fact that facebook realizes their stock is way overvalued, and so they used this opportunity to make a huge purchase which would be too expensive otherwise. The fact that a huge amount of the purchase price in stock is a strong signal for this. These same sorts of deals happened in the first internet bubble (although this is clearly different as there is also a huge…

Why is their stock overvalued? Do you have any evidence of this beyond you thinking there is a bubble? Honestly curious, since it seems to me their stock is rising for a reason: the fundamentals of the company are strong, and they have demonstrated an ability to rapidly react to new trends.

>Why is their stock overvalued?

Because delusional people still didn't learn their lesson from the first bubble.

>Do you have any evidence of this

Their P/E is 112. That's the very definition of overvalued. The price of their stock makes the company worth far more than they earn. If you purchased facebook, it would take you 112 years to break even on that "investment" at their current earning rate.

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

#447

Post by gregsq »

soperj wrote: post #362
olegious wrote: post #243

Earlier quoted context omitted.

Android users pay an annual fee.

how on earth do they charge it if you don't have a credit card associated with your play account? Because I've used whatsapp for well over a year and can't figure out how they'd charge me.

I don't know, but they have your phone number. In the UK at least that can be done with a premium SMS.

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

#450

Post by myzerox »

sentenza wrote: post #441
myzerox wrote: post #263

Earlier quoted context omitted.

They're buying access to a winner-take-all market.

Remember when we had standards and interoperability? Why would messaging be a winner-take-all market? I mean, it's just pushing around a bunch of bytes. Shouldn't be too difficult to specify.

It's because of network effects.

(I'm not going to switch to the 2nd best app where I can only reach 10% of my friends.)

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