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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

#531

Post by zippergz »

shubhamjain wrote: post #516
nullspace wrote: post #420

Earlier quoted context omitted.

It's not really "pop" technology. Surprisingly, it's not used much in the United States, but in India it's basically a replacement for text messaging. Everyone from a 13 year old child to my grand mom uses it to keep in touch with friends and family members across the globe. IMHO, they were able to get to such widespread everyday usage because they such awesome and reliable technology. Much better than what Google ha…

I thought it was the de facto messaging app across the world? Is there any particular reason why it is not used much in US?

I can only speak for myself, but in the US I have never seen any need for it. I text or iMessage with my friends, and while I have had WhatsApp installed for a long time, I've never found something it does better for me. If I needed to communicate with people I couldn't text with, or if I were paying per text, it would probably be more compelling.

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

#532

Post by downandout »

rokhayakebe wrote: post #280
downandout wrote: post #107

Earlier quoted context omitted.

I'm not sure I'd call the WhatsApp of today a startup.

Why not? ~50 employees, a couple of years old, $8M in funding.

They were just valued at $19 billion. Kind of not a startup.

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

#534

Post by bedhead »

sentenza wrote: post #462
bedhead wrote: post #432

Earlier quoted context omitted.

I have two additional and unrelated thoughts on this. First, the astonishing price paid is a very tangible indictment on the management of Facebook, and Zuckerberg especially. Combine this $19 billion with the Snapchat offer and Instagram, and it's clear that Facebook is looking frighteningly like Microsoft, which is to say a behemoth of a company that seems to flat-out miss every next big thing. I can't even imagine…

Something's fishy though. Compare these acquisition numbers to the numbers that float in more "money-prone" parts of the software business. For instance, I've never heared of that kind of money being thrown around regarding the suppliers of software that banks and traders use. It's not that a revolutionary social service shouldn't be worth billions, but What's App is messaging. And messaging in the long term could ju…

That's because bank infrastructure or CAD/CAM or ERP systems aren't particularly new or exciting, so there's no reason for a mania to take hold. The upside is generally known. But something like Snapchat or WhatsApp or hell even Tesla have these crazy "blue sky" opportunities, so people can extrapolate a kajillion dollars in profits one day and no one can definitively dispute otherwise.

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

#535

Post by statictype »

RandallBrown wrote: post #359

What does WhatsApp offer that regular old text messages don't? Is it just a price thing? I can group chat, send images, and send video with everyone, even people with dumbphones just fine using text messages (MMS).

MMS works very unreliably. At least for me and every single other person I know who has tried it.

Heck, even SMS can sometimes be unreliable, especially on international roaming.

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

#536

Post by tostitos1979 »

gutnor wrote: post #507
nilkn wrote: post #310

Earlier quoted context omitted.

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.

You would hope that from one bubble to the other people learn something. The last bubble, people thought than making stuff available online was enough (Do X but on the internet). The first crisis taught us you need to have an actual business model and a way to acquire client. But then, Google happened. Big user base can be monetized. So we have a second bubble where acquisition of user is the main driver, with the as…

Big user base monetization = ads. Are mobile ad cpi's really that high?

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

#537

Post by statictype »

zt wrote: post #391

Of all the companies founded since 2000, these are the following companies that are worth more than $10B: Facebook, LinkedIn, Twitter, WorkDay, and ... WhatsApp.

For what it's worth, I've never heard of WorkDay. I created a LinkedIn account and since then my only interaction with is archiving their spam mails.

I use WhatsApp more than I use Facebook or Twitter (and this is true of a lot of people outside U.S). In general, it may not be as active as Facebook or Twitter but its pretty damn high. Also - no ads or privacy issues or BS marketing.

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

#538

Post by shittyanalogy »

pbhjpbhj wrote: post #355
primitivesuave wrote: post #103

My uncle in India runs a construction company, and literally every single aspect of company communication is done over WhatsApp. Each construction site has to constantly post pictures on WhatsApp, and basically all management and payroll decisions are made through WhatsApp discussions. Apparently this is not an uncommon practice, as businesses that were once administered by pen and paper are now using WhatsApp to imp…

It's interesting to note from Whatsapp legal info that they say it's only for USA based users. cf my comment https://news.ycombinator.com/item?id=7267310 or http://www.whatsapp.com/legal/

The TOS doesn't say "only for" it says:

"The Service is controlled and offered by WhatsApp from its facilities in the United States of America. WhatsApp makes no representations that the WhatsApp Service is appropriate or available for use in other locations. Those who access or use the WhatsApp Service from other jurisdictions do so at their own volition and are responsible for compliance with local law."

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

#539

Post by jonnathanson »

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…

"We can assume Facebook is paying for the user base"

Respectfully, I don't know if that's the right assumption. Facebook has users. A metric shit-ton of them. :) In fact, many of WhatsApp's users are Facebook users, and vice versa.

This isn't a user acquisition play. It's a user engagement play. Facebook -- like everyone else in the world -- is well aware that it has an engagement problem. It also has a retention problem, especially with younger users (who are flocking to messenger programs). Finally, Facebook has some challenges internationally, where the social networking space is more regionally fragmented. WhatsApp is a lot bigger overseas than it is in the US (largely because it's a free alternative to SMS in countries where SMS carries significant charges).

So what's this really about? This is another defensive acquisition on Facebook's part. Entirely overpriced, in my humble opinion. Instagram was, in retrospect, an incredibly smart defensive buy. WhatsApp at $16 billion? Less clear.

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

#540

Post by gamblor956 »

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…

You silently agreed with her, while not realizing it.

Customers (lists/relations/etc) are considered intangible property with value. In the tax and law worlds, IP actually refers to intangible property in general, not just intellectual property (copyrights, trademarks, patents, trade secrets, etc.). However, for most companies, their intellectual property is their most value IP.

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