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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

#561

Post by prewett »

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…

It's $4B in cash, $12B in stock, $3B in restricted stock. FB's P/E is 111; normal companies are more like 20, let's pretend that FB is a growth stock and say it should be 30. That means that stock price is overpriced by a factor of 3 (and at least 2). So FB is really only paying $4B + $4B + $1B. And I'm guessing that they are only going to end up actually having to cough up 50% of those restricted stocks, so more like $8.5B. So a little under $20/user. What is the average lifetime value of a WhatsApp user? Seems like $20 is pretty, um, optimistic. But, who knows. People seem to pay for those stupid WeChat stickers, so if WhatsApp has anything like that, it could work. Also, there's the opportunity to become a "platform" and promote games and stuff through the service. That's worked fantastically for KakaoTalk, and WeChat is busy trying to copy it.

But I suspect part of it is, what is the lifetime value of a Facebook user? What is the lifetime value of a Facebook user if WhatsApp remains a competitor?

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

#562

Post by fractalsea »

shortsightedsid wrote: post #497
ams6110 wrote: post #405

Earlier quoted context omitted.

I'll admit to a distinct feeling, that I've started to lose touch with pop technology. I've never heard of WhatsApp. Though I had most definitely heard of Hotmail in 1998.

I actually got to know about the Acquisition on Whatsapp! My friend from NYC messaged me on it. Unlike SMS, what I really like about it, is the group chat feature. At any given day, I'm chatting on a group chat with friends from here in the US, Canada, India, Singapore and the UK. For that I pay $1/year. It's probably paid for itself in just a few days of use.

I second the group chat feature. my family had a constant group chat going on it. It works very well. I see that, and the easy way of sharing of voice, photos and videos as a big advantage over SMS.

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

#563

Post by drgath »

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.

> Remember when we had standards and interoperability?

And the carriers charged 20 cents per SMS [1]? Yup, I remember those days. No thanks.

[1] http://gizmodo.com/5832245/atts-new-text-plan-overcharges-yo...

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

#564

Post by kunaalarya »

anigbrowl wrote: post #483
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…

What's special about Whatsapp that made them choose this platform rather than (say) email, any other chap app, or even Facebook itself?

They were the first good option on Android and iOS and Blackberry when Blackberry was going down hill. In countries where BBM was strong and then started to fade, users went to WhatsApp. It used your phone number so everyone in your address book was using WhatsApp. I saw this first hand in Canada. Kik also did well but didn't gain traction like WhatsApp. Line & WeChat were/are East Asia focused. MessageMe was late to the game.

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

#565

Post by kunaalarya »

tostitos1979 wrote: post #536
gutnor wrote: post #507

Earlier quoted context omitted.

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?

Yes. $2-3 for games for quality users, and going up significantly once there's a mobile payments solution that works.

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

#566

Post by jonknee »

adventured wrote: post #299
smackfu wrote: post #140

Earlier quoted context omitted.

Twitter: 241,000,000 active users 30,230,000,000 USD market cap ---- $125 per user

With the caveat being that Twitter isn't rationally worth anywhere near $30 billion. Even if you said their sales was income, they'd be trading at nearly 50 times, and at that point they'd still be worth twice too much. Here's a prediction: as the easy money QE party comes to an end, the stock market melts, Twitter's growth grinds to a complete halt, investors realize there's only so much time in the day and Twitter…

> Here's a prediction: as the easy money QE party comes to an end, the stock market melts, Twitter's growth grinds to a complete halt, investors realize there's only so much time in the day and Twitter has lost the messaging space, Twitter is worth $5 to $7 billion if they're lucky.

It's not the QE money pumping up Twitter, it's a combination of tech being hot and a limited number of shared available (much of TWTR is still in lockup). If it were QE you'd see all sorts of firms with crazy valuations, but the standard blue chips are still pretty standard.

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

#567

Post by nwh »

Retric wrote: post #550
zanny wrote: post #543

Earlier quoted context omitted.

I'll shake my first and one day see people using open standards protocols rather than this morass of proprietary dribble. Until then, I'm marginally lonely on my xmpp clients, though the facebook integration really helps.

Proprietary messaging apps have a huge advantage in cutting down spam. Solve that and your open standard might just take off.

That's just security through obscurity. Seems to work for iMessage though, I've heard it's obfuscation is something incredible.

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

#569

Post by jonknee »

downandout wrote: post #532
rokhayakebe wrote: post #280

Earlier quoted context omitted.

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

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

No, they were acquired for $19B. That's exactly a startup. They had a small amount of VC and the revenue to match, but sold for a king's ransom--the storybook version of a startup.

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

#570

Post by yen223 »

gamegoblin wrote: post #11

That is a LOT of money. That being said, I use WhatsApp every day to chat with my friends around the world and it's really excellent. I know it's used a lot in other parts of the world even more, so I doubt this purchase is focused on US markets. It seems that every one of my Arab friends uses WhatsApp to talk to their families back home (and they use it at home, too). I don't know about other regions.

It's popular in Malaysia too. WhatsApp seems to be the messaging equivalent of soccer.
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