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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

#171

Post by sveme »

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…

As others said before, it's most likely a defensive move, against other interested parties but also against Whatsapp itself. I don't use and thoroughly dislike Facebook but I'm using Whatsapp groups daily with my closest friends and my climbing mates. In that sense Whatsapp has started to move beyond SMS and towards the social network market.

With such a large user base and their established mobile presence it would have been fairly easy to challenge Facebook in the social network field, so Zuckerberg might have seen that coming as well. In that light the announcement that Whatsapp will basically stay the same actually makes sense - it will stay the same and will not develop those features that could have threatened Facebook in the long term.

Well, I already sent some messages to my friends to move on to threema, which has the added benefit of having encrypted messaging and being located in Switzerland.

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

#172

Post by abc_lisper »

pcocko wrote: post #76

It's a bubble. I don't beleive it can sustained over time. So simple apps sold for huge quantity of money

I can't believe it either.

Few miles from FB and Whatsapp is Tesla, people consider it massively overvalued at 25Billion. It is almost laughable.

When you are a compulsive liar, people catch up to it, and you will all live in a lie world. This is very close to how Ponzi schemes work.

Billion is a lot of money. Since FB lied through their teeth, considered themselves demigods and levied idiot tax on poor investors, it is their time to turn around and take it in the rear.

Come on guys. 16B$?

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

#173

Post by panarky »

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…

$40 per user is roughly inline with the $3B Facebook was prepared to pay for Snapchat (though we don't have precise numbers on Snapchat MAUs).

This is another defensive move. Hundreds of millions of people sharing rich media in realtime on non-FB services is a genuine threat.

It's really a direct result of smart mobile devices. Facebook used to own the user's contacts, but now independent apps have direct access to device contacts without Facebook.

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

#174

Post by shmerl »

johngalt wrote: post #148
huskyr wrote: post #132

Facebook suddenly acquired the world's (if we exclude the US and China) most popular messaging service. I communicate with this app with all my friends, and share stuff that i have no intention of ever putting on Facebook. Everything that once seemed 'private' is now in the hands of a website that forces it users to share as much as possible with marketeers and advertising companies. It's gonna be one tough mission f…

The closest option is XMPP. Unfortunately it's suffered an extreme case of scope creep. http://en.wikipedia.org/wiki/XMPP

Whatsapp uses XMPP for the reference. However they modified the protocol to be incompatible (on purpose) and it's not federated obviously.

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

#175

Post by chadillac »

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…

The part that confuses me is Facebook has a messaging component... I can use it to message international people without incurring international SMS rates (which is a big reason a lot of people I know use WhatsApp).

WhatsApp charges annually for this (already free elsewhere) service. So I'm pretty confused why people would use WhatsApp rather than one of the many (Kik, Hangouts, Facebook, etc.) alternatives available?

If people could migrate their WhatsApp account they pay for into a Facebook account which is free it's a win/win for FB. They get the users ditching the paid service in exchange for adding nice numbers to their quarterly reports for signups, and they get a nice revenue stream for the hold outs that avoid FB because it's FB but are willing to part with $1/year for that functionality.

Smart move on their part, wonder if their name will taint the product for the existing userbase and send them to the aforementioned alternatives.

edit: said $10/year, I accidentally a 0.

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

#176

Post by flyinglizard »

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…

Your argument makes perfect sense when you're talking about real companies, with R&D, marketing, technology and all that. GM buying Tesla for 15% of its worth might make sense. But in the social space, companies are entirely seasonal, the barriers to entry are none, there's no way to predict user traction or behavior.

I understand this is how Facebook intends to keep itself at the top of the social heap, but with recent valuations (starting at Instagram), it'll be incredibly difficult to maintain this for long.

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

#177

Post by amirmc »

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…

Why does it make less sense to let it run independently (at least for now)? A team of 50 people are running a service that serves 400M MAU. That's impressive by any stretch and when you factor in that all of those are mobile users that's a compelling case for a company that purportedly had trouble figuring out it's mobile strategy.

I guess FB is in the market for any large scale mobile apps (first photos, now messaging) to ensure they have a dominant foothold on mobile.

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

#178

Post by kayoone »

gms wrote: post #61
NDizzle wrote: post #27

$16B for something I've never even heard of. I feel like I'm living under a pile of rocks.

Don't feel bad; no one really uses them in the US (except us foreigners to communicate with friends and family abroad). They are the de-facto messaging service in the rest of the world (except for China).

im curious, what do americans use instead?

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

#179

Post by TylerE »

peteforde wrote: post #165
TylerE wrote: post #141

Earlier quoted context omitted.

I'm not sure that sort of relativism makes sense. Making a really bad purchase doesn't make your earlier merely bad purchases less bad.

You really think Instagram was a bad purchase.

In so much as none of this handy-wavey social business models have ever proven to have sustainable profitability, yes.

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

#180

Post by muyuu »

pitchups wrote: post #131
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…

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

It made more sense for MS though. They were basically kickstarting their internet services and had very few users.

Facebook can mine some more data from this I guess, but something rather marginal from what they already have.

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