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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

#631

Post by superuser2 »

ams6110 wrote: post #405
pitchups wrote: post #131

Earlier quoted context omitted.

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

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.

In my experience, it's mostly used as a drop-in replacement for text messaging for

- people (especially preteens) with an iPod Touch or iPad Mini but not a smartphone/texting plan

- people with internationally distributed friends

- Android users who want iMessage functionality (friendly long messages, delivery confirmation, read receipts, sane group conversations, etc)

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

#632

Post by argumentum »

cylinder wrote: post #573
argumentum wrote: post #407

To everyone calling this symptomatic of a "bubble", remember that WhatsApp was not hyped like SnapChat or Instagram. It wasn't associated with "sexting" or plugged by Celebrities. A few years ago, my cousin arrived from India to start undergrad here .. when picking out her new smartphone, here was only one requirement: it had to run WhatsApp. She didn't care whether it was an iPhone, android or blackberry (back when…

None of the things you mention matter, frankly. Nobody is claiming whatsapp is worthless. It's the valuation. Just because your users are passionate doesn't mean you deserve a high valuation. And something missed here is that Indian, SE Asian users, et al aren't that valuable in terms of how much money you can make displaying mobile ads to them.

> Just because your users are passionate doesn't mean you deserve a high valuation

No one "deserves" any particular valuation: those numbers come from how much people are willing to pay, and how little you're willing to sell.

Due to the post acquisition success of Instagram, companies like SnapChat and WhatsApp have more leverage than their predecessors in these negotiations. Thus, they command higher valuations.

WhatsApp, though of course a Valley company, seemed to have been "discovered" overseas. It famously doesn't have ads and instead charges $1/year (which its users are willing to pay). In the short term, yes, India/SE Asia are less lucrative markets per person, but in the long term they have greater potential for growth. With the numbers as they are, looks like Zuckerberg intends this as a long term play.

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

#634

Post by superuser2 »

nullspace wrote: post #422
crucialfelix wrote: post #416

Earlier quoted context omitted.

WhatsApp has huge global growth. I heard that little chirp everywhere I went in India. friends in Africa use it all the time. in countries with SMS charges, whatsapp is a good deal.

> in countries with SMS charges The funny thing is that in places like USA, you pay exorbitant amounts (~20 USD per month) for text messaging (when the real cost should be almost 0), yet it's still not caught on here - which is kinda sad.

Not everyone has a smartphone. Many of the people I need to text (especially my parents) have feature phones with no data plans.

Having to remember which messaging system you should use for each person is annoying, so most people just use one.

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

#635

Post by blencdr »

philp wrote: post #182
notahacker wrote: post #149

Earlier quoted context omitted.

Destroy? There will be a host of new messaging startups created off the back of this, and suddenly the Snapchat valuation looks sane. Do one thing that Facebook does but better is the new gold rush. Sure, most of them will fail hard without raising a cent in revenue, but others will start to threaten to chip away at Facebook's market share.. Anecdata: I get a lot more messages on FB messenger than WhatsApp...

Whatsapp has virtually no market share in the US. In basically all markets outside of the US, however, they are dominating the messaging space. Text messages in major EU countries like Germany and France have been almost completely supplanted by WhatsApp.

Surprisingly in France you can have illimited text messaging for 2€ per month, 1 hour of communication included.

Though I'm not sure about you stats for usage.

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

#636

Post by pyrrhotech »

rgovind wrote: post #490
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 makes less sense when you realise that most of the user base of whatsapp is OUTSIDE USA

and that they use whatapp because they are poor. It is hard to make money off poor people. Short FB

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

#637

Post by Lucadg »

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…

or maybe they are simple paying to get our cell phone numbers? Something they tried to get from me for a long time and I always refused to give? Now they have it.

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

#639

Post by superuser2 »

A lot of people on HN talk about how Facebook is pointless and on its way out. And it's true, Facebook probably doesn't make a lot of sense to people who are steeped in an email culture.

Young adults are not. Facebook is far and away the dominant messaging platform. Email in high school was for spam, communicating with teachers, and passing attachments ONLY. Short, synchorous messages that you didn't mind typing with your thumbs would go via SMS, but more verbose synchronous conversations and email-like async conversations were invariably Facebook Messenger.

I can find anyone from my real life that I'm likely to want to talk to on Facebook just by knowing their real name and identifying their face in search results. It's entirely frictionless - no exchanging identifiers or mucking around with pseudonyms. And I can have a conversation synchronously or asynchronously, transitioning seamlessly between devices and modes of communication, with conversation history, read receipts, and delivery confirmation always available.

Messaging is a more important part of Facebook than I think much of HN realizes. It makes sense that Facebook would neutralize WhatsApp's threat to its hold on messaging.

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

#640

Post by keeptrying »

reubenswartz wrote: post #578

Like many people, I found the price staggering. However, given that WhatsApp is growing and may pass FB in active users in the next 2-3 years AND WA has a great monetization strategy... It's not crazy to think that in a few years 1B people would be paying $1 per year. Want to double revenues? How 'bout $2/year. $5? $20 in US and other first world markets, $2 in developing countries? Why not? In addition to the defens…

$50 bucks for life plan ... :)
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