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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

#671

Post by adsche »

russell_h wrote: post #661
shubhamjain wrote: post #516

Earlier quoted context omitted.

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?

By the time smartphones were widely adopted in the US, SMS already had massive market penetration. Trying to adopt something else when your entire social network already uses SMS is a losing game. This is why, IMO, Apple, Google and Facebook are the only companies really in a position to change the messaging game in the US. There is space for newcomers (see: Snapchat), but they're going to have to work hard to spread…

I don't know, SMS was huge in Germany as well, there were unlimited plans etc., still, today everyone uses WhatsApp. Group messages, broadcasts, media, cross-platform, and it's of course easier to convince people to use WhatsApp than Facebook.

I lived in the US for a while, and I can't really come up with any reason why it should be different there. Only that way more people are on Facebook (and those are also way more active). Still, I can't really explain why texts stuck around even for smartphone users.

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

#672

Post by qq66 »

continuations wrote: post #114

How did WhatsApp gain traction? Presumably most of their users already use facebook, which offers the same messaging functionality as WhatsApp. So why do people use WhatsApp instead of Facebook for messaging?

The number of people who want to send text messages is several times the number of people who want to use Facebook, especially given the cost of mobile data on prepaid phones.

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

#673

Post by skrebbel »

shortsightedsid wrote: post #500
josh2600 wrote: post #104

For everyone saying this is a waste of money, consider the commentary around Instagram at $1B. Basically the world said that this was a horrible acquisition at the time, but in retrospect, buying Instagram was quite cheap. Buying your closest competitor for less than 15% of your market cap is usually a good idea. Fast forward to today. What'sapp is the dominant messaging application across the world. Carriers hate it…

The only thing that Facebook does not have today (post acquisition) is a good Video Conferencing app. That's the only reason why I use Google Plus - for Google Hangouts. A Google Hangouts competitor that has it's features (multi-party unlike Skype) would be worth building.

Skype has that. Yes, it's paid, but so is Whatsapp.

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

#675

Post by camillomiller »

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 don't think so. This is a strategy to crack the Asian markets and the markets of developing countries where Facebook is not so used while whatsapp has practically replaced SMS messaging

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

#676

Post by junto »

lucb1e wrote: post #643
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.

I'm in the same position. I deleted my Facebook account last year and now it feels like they have rejoined me without asking me. Damn it.

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

#677

Post by skrebbel »

auctiontheory wrote: post #652
superuser2 wrote: post #634

Earlier quoted context omitted.

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.

I have a hard time believing that the density of WhatsApp-capable phones is higher across the developing world (where WhatsApp is popular) than in the US.

Probably not, but it's close to equally high, which is one of Whatsapp's strong points.

Additionally, it's not just popular in "the developing world" (whatever that means), but also in many European countries. I haven't seen a map, but I suspect that Whatsapp is very popular nearly everywhere outside the US and China.

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

#678

Post by yeukhon »

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?

There are 450M not 450MM. What is the double MM doing there?

Sure but then minus the operation cost, tax, etc. You get down to very little. I don't dispute FB can turn it into a revenue machine by "inventing" a new way of looking at mobile and mobile messaging, but at this stage I am afraid the revenue that I read from Quora doesn't justify a 19B total acquisition. The price is too high; Twitter is about 40B ~ 50B (http://blogs.wsj.com/moneybeat/2014/01/03/twitter-near-70-va...). So WhatsApp is at least 1/3 to 1/2 of Twitter, depending on how you look at it. And we probably can agree Twitter, FB are all about # of users; unlike Google which makes 60B revenue in 2013, Google has a real revenue model + user base. If you sell Google for $100B I won't even complain and I probably think that's a big bargain. (http://qz.com/137191/googles-record-valuation-is-still-130-b...)

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

#679

Post by _delirium »

superuser2 wrote: post #639

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 wit…

Among my circle of friends, that used to be the case, but it's increasingly rare that I find anyone actually signed in to FB chat, so now it's only usable for asynchronous messaging. A bunch of people seem to have moved to either Skype, Hangouts, or iMessage for synchronous chat. I don't have any great insight into which demographics that might be happening in, though.

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

#680

Post by ajhit406 »

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…

This is an unsophisticated perspective. Have you seen how fast WhatsApp is growing? They could easily cross 1B users in a year. Daily actives are at 72%. They are insanely engaged.

The move is probably largely anti-competitive, but there are certainly inroads to drive additional facebook engagement, which further boosts revenues. It's expensive, but remember that FB is a 170B company.

Lets just hope that FB doesn't get too invasive with the product.

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