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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

#641

Post by pyrrhotech »

discardorama wrote: post #186
yeukhon wrote: post #44

16B? That's a B, people. While there are a lot of whatsapp users (and people have to pay to use it), wow, that's still a lot of money! How can they justify revenue that way? How can any company ever consider such acquisition? I don't even think Google can even make 16B like this. See this discussion: http://www.quora.com/WhatsApp-Messenger/How-much-revenue-is-... $20M net revenue, at most, right? With future expansio…

Whatsapp charges $1/year IIRC. So, with 400MM users, you can expect ~$400MM/year revenue?

AFAIK that's only the plan. right now they have very little if any revenue. People use Whatsapp because they are too poor to afford text messaging. My guess is that lots will leave even at 1 USD per year

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

#643

Post by lucb1e »

notlisted wrote: post #544

I know What's Up. Facebook just bought the world's largest (and unlisted) mobile phone number directory: WhatsApp's convenient 'matching by phone number' feature uploads of all of your phone contacts to their servers. Though positioned as one of the good guys, they too had their price. With this acquisition, FB bought the ultimate data set of users and leads, and with it secured access to the last remnants of your pr…

Exactly my thoughts. Any idea how to get out of Facebook's database? I'd be willing to pay but then they have my full name instead of just a fake and my phone number.

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

#644

Post by [deleted] »

nousernamesleft wrote: post #427
erikpukinskis wrote: post #312

Earlier quoted context omitted.

I think the number of active users is what makes this comparison invalid. At the time of AOL's acquisition of ICQ it had 20 million active users¹. WhatsApp has 430 million. In order to eclipse WhatsApp, a competitor would have to get substantially more than 10% of the entire global population. ICQ was dominant in its heyday, but the game wasn't won yet, so it was theirs to lose. In some sense that's still true: we ha…

Except the number of active users reinforces his point, it doesn't make it invalid. >At the time of AOL's acquisition of ICQ it had 20 million active users¹ Or 40% of the internet using population of the world. >WhatsApp has 430 million Or 16% of the internet using population of the world. 40% is clearly closer to "won" than 16% is.

[deleted]

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

#645

Post by erikpukinskis »

nousernamesleft wrote: post #427
erikpukinskis wrote: post #312

Earlier quoted context omitted.

I think the number of active users is what makes this comparison invalid. At the time of AOL's acquisition of ICQ it had 20 million active users¹. WhatsApp has 430 million. In order to eclipse WhatsApp, a competitor would have to get substantially more than 10% of the entire global population. ICQ was dominant in its heyday, but the game wasn't won yet, so it was theirs to lose. In some sense that's still true: we ha…

Except the number of active users reinforces his point, it doesn't make it invalid. >At the time of AOL's acquisition of ICQ it had 20 million active users¹ Or 40% of the internet using population of the world. >WhatsApp has 430 million Or 16% of the internet using population of the world. 40% is clearly closer to "won" than 16% is.

> 40% is clearly closer to "won" than 16% is.

No, because the internet was expanding rapidly, so it wasn't won at all. That's like saying a basketball game is won because one of the teams got 100% of the points awarded in the first minute.

My point is that as "number of happy messaging users" approaches "number of humans" things will get harder and harder for a messaging upstart. Whoever I was responding to was suggesting that there will just be a long chain of succession forever and ever. I'm saying I think surpassing the encumbants was easy five years ago, is still doable today, but will be quite hard in 20 years.

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

#646

Post by anigbrowl »

kunaalarya wrote: post #564
anigbrowl wrote: post #483

Earlier quoted context omitted.

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…

Thanks for the succinct summary.

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

#647

Post by BogdanCalin »

nilkn wrote: post #310
bedhead wrote: post #64

When these bubbles really get crazy, you start questioning your sanity and wondering whether maybe you're just plain wrong. You actually start wondering if the valuations are justified after all, whether it be a house, stock certificate of a tech company, the mineral rights to some acres in the Haynesville shale, or some land on the Vegas Strip. My head hurts.

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.

Of course they can afford this. Facebook has currently a market cap of $173.35B (https://www.google.com/finance?q=FB)

They spent on WhatsApp $4B (cash) and $(12+3)B (in stock). $12B is nothing when you have $173B.

If the $173B evaluation is correct, it's a totally different story. But as long as people think it's correct, Facebook can profit and buy any competitor with investor's money.

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

#648

Post by ArcticCelt »

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…

With their $1 subscription per year model,they should recoup their investment in 40 years.

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

#649

Post by Sivart13 »

ulfw wrote: post #338
lancewiggs wrote: post #244

Earlier quoted context omitted.

Where the seasons extend over a few years - yes. MySpace, Friendster, Slashdot, Hotmail etc. were the same.

Yea like search. See altavista, goto.com, inktomi, google...

I am very happy with your argument. I will use this argument in the future.
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