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Famous tech acquisitions’ cost per user

public.brightside.io

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Re: Famous tech acquisitions’ cost per user

#41

Post by lifeisstillgood »

seanmcdirmid wrote: post #30
nl wrote: post #23

Earlier quoted context omitted.

Cat gifs are pretty universal. But seriously: I've had people on conference calls when they couldn't understand the language, but someone wanted them to see slides. The fact they could join the call (in that case on Skype) definitely made the network more valuable. You might argue that the fact you can't speak to some of them drops the value per user, and that is true to some extent. But the fact they are on there an…

Cat gifs aren't a thing in china, I think its mostly an American fetish.

All in good time, all in good time

Re: Famous tech acquisitions’ cost per user

#43

Post by tav »

logicallee wrote: post #22
oskarth wrote: post #10

Wow. This graph is certainly illuminating: https://public.brightside.io/v1/chart/321ef2c603e8d67080afcd... 450000000 is a lot of users. Metcalfe's law says that the value of a communication network is proportional to the square of the connected users. Then add to this the amazing growth they are seeing. I don't think people quite realize what this means. EDIT: In general, it baffles me how many armchair opinionators…

isn't the obvious graph to ask for cost per user / revenue per user? (i.e. "acquisition price" per earnings per user.) After all, that's the main way that we can consider a per-user cost to be "high".

A bunch of ZeroDivisionErrors doesn't look so pretty :)

Re: Famous tech acquisitions’ cost per user

#44

Post by aragot »

alexeisadeski3 wrote: post #36
chavesn wrote: post #28

All this shows to me is how useless it is to compare by "cost per user". The note at the bottom says "Facebook acquired WhatsApp for 16 billion dollars, the largest startup acquisition to date. Cost per user was comparable to Google's YouTube acquisition." . It's sort of close, but we're still talking about a swing of >30% there -- $5 billion dollars in WhatsApp's case. There are many things missing from "cost per us…

Oh my god... I'd forgotten completely about YouTube. At under $2B, that must have been one of the best acquisitions of the whole bunch. YouTube for 1/10 the cost of WhatsApp.

How many were they at YouTube when they got bought?

I tend to think more about acquisitions as capital per employee, as in, that's how efficient they are at creating value. It's more interesting that comparing users because of the "users doing what" question. I'm disappointed i can't find graphs about those. Last companies I checked (but I can't remember which ones), the capital was around $1m per employee. Except for WhatsApp.

Re: Famous tech acquisitions’ cost per user

#45

Post by [deleted] »

aragot wrote: post #44
alexeisadeski3 wrote: post #36

Earlier quoted context omitted.

Oh my god... I'd forgotten completely about YouTube. At under $2B, that must have been one of the best acquisitions of the whole bunch. YouTube for 1/10 the cost of WhatsApp.

How many were they at YouTube when they got bought? I tend to think more about acquisitions as capital per employee, as in, that's how efficient they are at creating value. It's more interesting that comparing users because of the "users doing what" question. I'm disappointed i can't find graphs about those. Last companies I checked (but I can't remember which ones), the capital was around $1m per employee. Except fo…

[deleted]

Re: Famous tech acquisitions’ cost per user

#48

Post by simonsarris »

I do not like charts like this because their existence implies that cost per user somehow matters, or is a deciding factor even, in the price of an acquisition.

Even if that was the major metric in determining a price, there's often a very large difference between the number of users currently and the expected number 1 year or 5 years out.

You don't buy a company because of the number of users it has right now. You buy it because you think you can do something better with it, or to be defensive in a field, or to expand your own customer lists.

What's more, not all users are created equal! When Flickr for instance was aquired, what percentage of users were paying users?

I think its hard to make any real generalizations here, but better than a chart of cost per user, I think this is probably closer to a chart of how badly Company X feels it needs some audience. It's some formulation of growth, panic, defensiveness, etc.

Re: Famous tech acquisitions’ cost per user

#49

Post by rkuykendall-com »

TTPrograms wrote: post #15
oskarth wrote: post #10

Wow. This graph is certainly illuminating: https://public.brightside.io/v1/chart/321ef2c603e8d67080afcd... 450000000 is a lot of users. Metcalfe's law says that the value of a communication network is proportional to the square of the connected users. Then add to this the amazing growth they are seeing. I don't think people quite realize what this means. EDIT: In general, it baffles me how many armchair opinionators…

This was exactly the chart I wanted to see after I saw the first one. ...but did they really put a LLS line through that dataset?

It's an API that puts an LLS line through everything. If it isn't meaningful, ignore it.

Re: Famous tech acquisitions’ cost per user

#50

Post by rm999 »

It would be interesting to compare this to the equivalent metric for companies that went public: the market cap per user at IPO (or maybe X days after the IPO if there's a lot of volatility?). I'm curious how the valuations differ between IPOs and acquisitions. On one hand IPOs are determined by the open market instead of opaque decisions by a small handful of people. On the other hand, private acquisitions are probably less regulated and allow for more insider information in the pricing (?).

Some other dimensions I'd be interested in are the number of employees, year, current number of users, and (for public companies) current market cap. For acquisitions I'd be curious if there are any decent objective metrics of the "success" of the acquisition.

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