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Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

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Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#21

Post by psbp »

gojomo wrote: post #18

There must have been other bidders – such as Google, Apple, Microsoft – who saw WhatsApp as an end-around Facebook's social dominance. So imagine one of those other bidders had won, at a lesser price. Facebook might still have taken a 5% hit, facing a newly-empowered competitor. At least now, as with Instagram, the threat has been absorbed into the mothership. It's a rich price, but arguably strategically justified.…

So should facebook absorb every social threat? What would happen if Google's hangouts started to become popular, or another startup?

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#22

Post by gobbluth »

mmanfrin wrote: post #19
gobbluth wrote: post #15

How the HELL did Everpix die? No, seriously. Everpix DOMINATED WhatsApp on every possible metric: social networks/sharing, user commitment, revenue, advertising information, and long-term potential. Anyone can (and will) switch instant messenger networks on a whim. There's literally no barrier to keep me from telling friends to contact me on Hangouts from now on. A photo site tells you where people go, what they do,…

430mil of network-affect attached users is not 'whimsically unattached user base'.

Of course they're unattached. It's just another instant messenger. Or are people still loyal to ICQ, AIM, MSN Messenger...?

(Even worse, WhatsApp relies on teenagers. How many social circles endure beyond high school? Do you still IM people you knew back then... or even as recently as two years ago?)

Maybe adults will fall back on the best messenger based on technical merit (probably Hangouts?), but WhatsApp is neither sophisticated nor particularly appealing for the long term. I'll put down money that it'll be forgotten within the decade. What the hell was Facebook thinking?

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#23

Post by Tohhou »

psbp wrote: post #21
gojomo wrote: post #18

There must have been other bidders – such as Google, Apple, Microsoft – who saw WhatsApp as an end-around Facebook's social dominance. So imagine one of those other bidders had won, at a lesser price. Facebook might still have taken a 5% hit, facing a newly-empowered competitor. At least now, as with Instagram, the threat has been absorbed into the mothership. It's a rich price, but arguably strategically justified.…

So should facebook absorb every social threat? What would happen if Google's hangouts started to become popular, or another startup?

No, for their own interest they should do what they can to combat the most vital threats.

>What would happen

That would be more of a problem for Microsoft's Skype.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#24

Post by [deleted] »

mmanfrin wrote: post #17

5% is what, 8-9bil market value? This deal gives out 12bil in stock , so the loss in market cap is less than the dilution of shares from the deal. In other words, in hearing that 12bil of worth was being taken away from shares, only 75% of that was realized in the fall, making this a net gain in share price (not counting cash). If you count cash, this actually seems pretty neutral.

[deleted]

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#25

Post by psbp »

Tohhou wrote: post #23
psbp wrote: post #21

Earlier quoted context omitted.

So should facebook absorb every social threat? What would happen if Google's hangouts started to become popular, or another startup?

No, for their own interest they should do what they can to combat the most vital threats. >What would happen That would be more of a problem for Microsoft's Skype.

Hangouts is also a messaging app that is meant to replace texts.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#26

Post by anigbrowl »

mmanfrin wrote: post #17

5% is what, 8-9bil market value? This deal gives out 12bil in stock , so the loss in market cap is less than the dilution of shares from the deal. In other words, in hearing that 12bil of worth was being taken away from shares, only 75% of that was realized in the fall, making this a net gain in share price (not counting cash). If you count cash, this actually seems pretty neutral.

Doesn't that assume everyone has priced in the news already? I mean, it might fall another 5% by this time tomorrow and completely invalidate your thesis - having said that it seems to have recouped some of the loss already. I just think it's going to take more than a few hours to see the full effect.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#27

Post by zhaodaxiong »

nilkn wrote: post #20
mmanfrin wrote: post #19

Earlier quoted context omitted.

430mil of network-affect attached users is not 'whimsically unattached user base'.

230 million of those users didn't exist nine months ago. Why are you so sure they'll still be there in another nine months?

Why not saying: another 230 million may be added in the next nine months... If you know qq or wechat, you will understand IM has serious market value...

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#28

Post by gamblor956 »

gobbluth wrote: post #15

How the HELL did Everpix die? No, seriously. Everpix DOMINATED WhatsApp on every possible metric: social networks/sharing, user commitment, revenue, advertising information, and long-term potential. Anyone can (and will) switch instant messenger networks on a whim. There's literally no barrier to keep me from telling friends to contact me on Hangouts from now on. A photo site tells you where people go, what they do,…

You're comparing apples and oranges.

Everpix is an instagram competitor--it is a photo sharing app--and should be compared to instagram. BTW, in case you haven't noticed--Facebook bought instagram last year, and even before that it allow users to attach meta data (location, etc.) to their photo uploads.

Whatsapp is a text messaging app, and should be compared to iMessage, Google Talk, Skype, and SMS. In that regards, its clear why WhatsApp succeeded--it was the default messaging app in dozens of countries.

The price is baffling, sure, but the reason that Whatsapp survived and Everpix did not is pretty clear. Whatsapp scaled, and Everpix did not. Text messages take up a few bytes; pictures take up a few megabytes. They could probably fit multiple users' entire messaging histories in the space that a single photo took up. Bandwidth costs--also a fraction of Everpix's. Rent and other fixed costs--definitely a fraction of Everpixs, which chose to situate itself in one of the most expensive locations in the world for a business with minimal revenue.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#29

Post by gojomo »

psbp wrote: post #21
gojomo wrote: post #18

There must have been other bidders – such as Google, Apple, Microsoft – who saw WhatsApp as an end-around Facebook's social dominance. So imagine one of those other bidders had won, at a lesser price. Facebook might still have taken a 5% hit, facing a newly-empowered competitor. At least now, as with Instagram, the threat has been absorbed into the mothership. It's a rich price, but arguably strategically justified.…

So should facebook absorb every social threat? What would happen if Google's hangouts started to become popular, or another startup?

Absorbing upstart threats worked for Rockefeller!

And yes, social threats that have half-a-billion active users, and still-accelerating adoption, definitely deserve Facebook's acquisition attention.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#30

Post by nly »

gobbluth wrote: post #15

How the HELL did Everpix die? No, seriously. Everpix DOMINATED WhatsApp on every possible metric: social networks/sharing, user commitment, revenue, advertising information, and long-term potential. Anyone can (and will) switch instant messenger networks on a whim. There's literally no barrier to keep me from telling friends to contact me on Hangouts from now on. A photo site tells you where people go, what they do,…

> How the HELL did Everpix die?

Dropbox? It's a place to store photos. Who cares really?

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