431–440 of 831 posts
$16B for something I've never even heard of. I feel like I'm living under a pile of rocks.
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.
First, the astonishing price paid is a very tangible indictment on the management of Facebook, and Zuckerberg especially. Combine this $19 billion with the Snapchat offer and Instagram, and it's clear that Facebook is looking frighteningly like Microsoft, which is to say a behemoth of a company that seems to flat-out miss every next big thing. I can't even imagine how many more things Facebook will end up buying because they failed to build a good product themselves. If I was a shareholder (and I'm not, anymore) I would sell today and never look back. In a world where actions speak louder than words, Facebook is telling us they simply don't have the ability to create value internally.
Second, this is an absolutely perfect microcosm to describe the ever-expanding wealth inequality. I'm not saying this as a lament, just as an observation. Technology has fundamentally changed the way that wealth is created, and I believe it's the single largest cause of the wealth gap. Think about it. Thirty years ago, what would it have taken to create $19 billion of value in a new company? How many thousands of employees would it take? How many years, if not decades of hiring people, paying them, paying suppliers, providing pensions, etc? By the time that company was worth $19 billion, so many people would have been involved...that wealth would've been very spread out. Today, thanks to technology, $19 billion was created in a couple years, concentrated in just a couple dozen people. Folks, there is no escape from this. The genie is out of the bottle.
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How'd you get your friends to move over to Telegram? I'm trying to get that ball moving with my circle of friends.
Better yet, how do we get people to move to something distributed so that Facebook (or Google or anyone else) cannot acquire the service. If we just move to another decentralized messaging service, that service will eventually get gobbled up as well, and we'll have to rinse and repeat.
To be clear, I don't doubt that the technical side is very feasible. It's the user acquisition side that seems improbable except as a commercial venture.
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…
400,000,000 active users [0] 16,000,000,000 USD 10 years ---- $4 per user and per year
Remind me what AOL Messenger, MSN Messenger, ICQ, Yahoo messenger, are worth today.
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 the RSU it's $19bn USD. That would make it even higher to ~$47 per user
Like, I don't know, maybe a steel mill or copper mine or something.
* "In the event that WhatsApp is acquired by or merged with a third party entity, we reserve the right to transfer or assign the information we have collected from our users as part of such merger, acquisition, sale, or other change of control." [they go on to say that they may not be able to control use of information in cases which include "reorganization"] http://www.whatsapp.com/legal/
Still seems ridiculously expensive.
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Cyclical
Cyclical means they'll come back up. Somehow I doubt that's the case with MySpace, bebo etc.
Plants that die completelyaway at the end of each growing season are called 'Annuals' (vs. perennials), but I think that term would be too confusing to be useful ;)
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I'll admit to a distinct feeling, that I've started to lose touch with pop technology. I've never heard of WhatsApp. Though I had most definitely heard of Hotmail in 1998.
WhatsApp has huge global growth. I heard that little chirp everywhere I went in India. friends in Africa use it all the time. in countries with SMS charges, whatsapp is a good deal.
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yes yes and yes. But boy - 16 billion.
The opportunity cost is much larger if they miss out. It's the difference between ponying up tons of cash to stay relevant or fading into obscurity.
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I conjecture that this price is a reflection of the fact that facebook realizes their stock is way overvalued, and so they used this opportunity to make a huge purchase which would be too expensive otherwise. The fact that a huge amount of the purchase price in stock is a strong signal for this. These same sorts of deals happened in the first internet bubble (although this is clearly different as there is also a huge…
Why is their stock overvalued? Do you have any evidence of this beyond you thinking there is a bubble? Honestly curious, since it seems to me their stock is rising for a reason: the fundamentals of the company are strong, and they have demonstrated an ability to rapidly react to new trends.
Not saying it's impossible, but they're already very large. They have as many users as they're going to get (who isn't on there now?) so they need to earn 7x the income from the existing base.