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

Post by fleitz » Thu, Feb 20, 2014, 1:01 AM UTC

d4nt wrote: post #412

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 was talking to a lawyer earlier today and she said something like "97% of Facebook's value is in their IP (intellectual property)" and I silently thought, no, their entire value is in the fact that they have active users. Without the network effects of active users, they are worth almost nothing. They are like a social networking black hole, what makes them big is that they are already big, and that's all. So if an…

Post by fleitz » Thu, Feb 20, 2014, 1:02 AM UTC

bradleyjg wrote: post #286

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…

The biggest shareholder hero of dotcom 1.0 was Steve Case buying a real company (Time Warner) with bubble shares. But is whatsapp Time Warner? $1/user/year even with a huge user base is still not that much revenue.

Post by adventured » Thu, Feb 20, 2014, 1:03 AM UTC

rgovind wrote: post #212

kenshiro_o wrote: post #125

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. 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…

Don't look at it as a messaging company. Look upon it as a communication company. Over the last 20 yrs, any company which has make communication with others easier has profited handsomely....eg Skype, mobile-phone operators.

Post by loceng » Thu, Feb 20, 2014, 1:06 AM UTC

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

Post by omarchowdhury » Thu, Feb 20, 2014, 1:07 AM UTC

steven2012 wrote: post #228

In one fell swoop, Snapchat went from fools to geniuses. Unbelievable.