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Ask HN: How the hell is Whatsapp worth $18 billion?

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Ask HN: How the hell is Whatsapp worth $18 billion?

#1
$40 per user someone calculated to be.

My question is, how is it $40 when the app itself is free and doesn't get the $40 from the user?

How will Facebook monetize it?

The moment they track users or show ads won't people leave and a new Whatsapp emerges?

Please help me understand how MAU without pay from user's wallet works because porn sites have a lot of MAU and they are not getting bought out, and they are free and offer value to the users as well.

Re: Ask HN: How the hell is Whatsapp worth $18 billion?

#3
Facebook mentioned the volume of messaging sent through the application is approaching that of the SMS volume of the entire world. So, it's like buying a huge (the largest by far) global telco which only allows texting. In some poor countries, that's all people really use a cell phone for anyways. Calls are too expensive, so you see far more people texting than talking.

As big as thing thing is, it's possibly headed to 1 billion users. I'm assuming that's about as massive as anything which exists right now. It's one big platform among very few that are operating at that level.

I just don't think there is any comparison. Money doesn't matter. You make big plays. If Zuckerberg were thinking small when he built Facebook, it would be a small e-commerce store selling T-shirts or something.

Re: Ask HN: How the hell is Whatsapp worth $18 billion?

#6
I read a comment that said people run their entire businesses on it, and that in many places there is a 90% chance that someone you're talking to has WhatsApp on their phone. Sounds pretty valuable to me. It's a communication platform, what's more valuable than communication.

You might say they don't have enough lock-in, that someone else could come along and take their business. True, but I don't think that changes the value of this space in general. People always say that startups focus too much on problems that young white males tend to have, well here's something that's as generally useful as you can get.

Re: Ask HN: How the hell is Whatsapp worth $18 billion?

#7

I read a comment that said people run their entire businesses on it, and that in many places there is a 90% chance that someone you're talking to has WhatsApp on their phone. Sounds pretty valuable to me. It's a communication platform, what's more valuable than communication. You might say they don't have enough lock-in, that someone else could come along and take their business. True, but I don't think that changes…

Imagine sending money via What's App.

Re: Ask HN: How the hell is Whatsapp worth $18 billion?

#8
price is what you pay, value is what you get. it cost 19b, doesn't mean it's worth 19b. intrinsic value is the amount of future cash flow the business will generate discounted to present value. projected earnings must be measured against the returns of the s&p 500 rate of return 6% per year adjusted for inflation. they would need to have profits in the range of 500M to 1B for that valuation compounding much higher than that. it is a totally bogus valuation based on new metrics a la zuckyberg

Re: Ask HN: How the hell is Whatsapp worth $18 billion?

#10
post #9

Nobody has answered the OP's question: why $18B? why not $18M or $523M?

Isn't the price somewhat arbitrary? WhatsApp's market value is based not on revenue but on what the highest bidder will give them. WhatsApp probably had an idea of what the big players (Apple, Google, Facebook) might offer and that becomes what their going rate is.

I don't know if this is how the amount of an offer is determined but it sounds plausible to me.

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