Facebook buys WhatsApp for $16 billion

If you can't beat 'em, buy 'em.

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[bburdge]

Wow, having flashbacks of the late 90s here. So when does the Web2.0 bubble burst?

 

[caeldan]

... Ugh.
Though I guess that could actually give a good push to people to use BBM now that it's got BBM Voice and Channels fully functional on Android and iOS plus a decent contact search available.

 

[M-S-G]

Next WhatsApp update will require access to your music, media, wifi and gps location.
And, all the buttons will be reorganized in mirrored order.

 

[USMA56795]

Did they really just drop $16B for an instant messaging app?

 

[jandrese]

First Snapchat now WhatsApp? I don't think the management at Facebook has a firm grasp on the value of money. They're like Dr. Evil trying to estimate how much is "a lot".

 

[raz3000]

I hate this. I use WhatsApp to talk to relatives overseas. Looks like we'll have to find an alternative...

 

[Shudder]

What a bargain! They were worth at least 17B

 

[DarkSkyForever]

WSJ and a few others are reporting the deal at 19 Billion with cash and stock.

http://online.wsj.com/news/articles/SB1 ... 2029288302

 

[KitsuneKnight]

So... how exactly does WhatsApp make any money? Why are they worth this much? Was Facebook merely trying to buy the 400+ million users?

 

[murst]

Wow, I thought Microsoft's purchase of Skype for $8.5 billion was crazy. Skype at that price was a hell of a bargain compared to this.

 

[Wickwick]

As soon as FB starts to mod and integrate WhatsApp and SnapChat the tweens and teens will decide that they're passe and move onto something their grandparents aren't using.

 

[toll]

KitsuneKnight[/url]":3s5f79vy]So... how exactly does WhatsApp make any money? Why are they worth this much? Was Facebook merely trying to buy the 400+ million users?

I believe WhatsApp has a pay tier. Or at least they kept warning me that I would have to pay for the service soon, but I never had to.

 

[ev9_tarantula]

KitsuneKnight[/url]":5hcpq043]So... how exactly does WhatsApp make any money? Why are they worth this much? Was Facebook merely trying to buy the 400+ million users?

Some of the users pay $0.99 per annum. The users. Yes.

 

[pyu]

KitsuneKnight[/url]":1i563vvq]So... how exactly does WhatsApp make any money? Why are they worth this much? Was Facebook merely trying to buy the 400+ million users?

Though it's free on other platforms, I actually paid for it on iOS. From what I see, Whatsapp's is extremely big in Asia and has penetrated China as well.

If the figures released by Whatsapp is correct, then yes, Facebook is seeking that 400+ million users and most likely the expertise which built it.

 

[Ladnil]

KitsuneKnight[/url]":355n4n40]So... how exactly does WhatsApp make any money? Why are they worth this much? Was Facebook merely trying to buy the 400+ million users?

$40 per user. That seems like a lot to me, considering 90+% of those 400 million were probably already also on Facebook.

 

[Ars of Ares]

Another account to delete...

 

[Xavin]

Did they really just drop $16B for an instant messaging app?

No, they dropped $16B for 450 million user accounts. that's $35 per account which seems high, but then again $13B of that is stock, so it's not quite like it's real money.

 

[Scott M.]

DSF1942[/url]":26vo6u44]WSJ and a few others are reporting the deal at 19 Billion with cash and stock.

http://online.wsj.com/news/articles/SB1 ... 2029288302

The $3 billion is on a 4 year vesting agreement it sounds like, so $16 billion up front.

Some perspective,
This deal is half the market cap of yahoo, (ex-yahoo employees founded the company) https://twitter.com/sama/status/436265069366616064


That's $35 per active user https://twitter.com/BenedictEvans/statu ... 5960045568

That's 9.2% of the value of Facebook https://www.google.com/finance?q=NASDAQ%3AFB (assuming the $16B number)

 

[Infidel]

raz3000[/url]":1j6pt8ru]I hate this. I use WhatsApp to talk to relatives overseas. Looks like we'll have to find an alternative...

I've used Viber and Voxer with success. Going to try Telegram next as I've heard good things about file transfer speed and I like their perceived ethos, certainly not going to be using Whatsapp any more, that's for sure.

 

[ev9_tarantula]

murst[/url]":1i5tfdvn]Wow, I thought Microsoft's purchase of Skype for $8.5 billion was crazy. Skype at that price was a hell of a bargain compared to this.

Buying Nokia's mobile division cost Microsoft "only" about 40% of this deal.

If you had a time machine and went back to 2005, and told the guys who run Nokia that by 2014 an instant messaging app with very little revenue would worth more than twice their gigantic highly profitable phone business those Nokia guys would have thought you were completely freaking nuts.

 

[PinkRabite]

The day Instagram integrates with Facebook as one interface is the day a lot of people stop using Instagram (and I barely use Facebook anymore as it is). Facebook grew so big, so fast because it was cool for young people. Then their parents started joining and kids started looking for ways to share socially in a separate environment, which is part of why Instagram started blowing up. Get parents and grandparents commenting on Instagram pictures and they will start looking elsewhere (Snapchat is already filling part of that role for some younger kids). Facebook is no longer cool or relevant for young people and instead is tolerated as the easiest way to keep in touch with family members and friends who aren't on Twitter. Facebook apparently is trying to buy up these social networking apps because they still have that element of hot social phenomena but what they're doing in the process is killing what attracts people to them in the first place.

I guess you can't argue with statistics and 1 billion users certainly is impressive but I just get this impression that people are only using Facebook out of necessity and not because they want to. These acquisitions are like a 30-something desperately trying to hold on to what made their twenties fun. Just kinda sad.

 

[ken27238]

So 16 instagrams.

 

[murst]

ev9_tarantula[/url]":2xivhwcn]

murst[/url]":2xivhwcn]Wow, I thought Microsoft's purchase of Skype for $8.5 billion was crazy. Skype at that price was a hell of a bargain compared to this.

Buying Nokia's mobile division cost Microsoft "only" about 40% of this deal.

If you had a time machine and went back to 2005, and told the guys who run Nokia that by 2014 an instant messaging app with very little revenue would worth more than twice their gigantic highly profitable phone business those Nokia guys would have thought you were completely freaking nuts.

Sure, but what does that have to do with the price? I think the 'time machine' part would qualify you for 'completely freaking nuts'.

 

[Tijger]

ken27238[/url]":2m53fm9n]So 16 instagrams.

2 Nokia's

 

[Celtic1888]

$16 Billion ?

Good lord...Facebook is great at generating perceived value but really, really, really overpays for it's acquisitions

 

[StealthFocus]

16 billion? What's app with that?

 

[okami]

M-S-G[/url]":3dl6ds2i]That comes out to $3.55 per user.

Should I've known this I would have created an a couple of extra accounts to inflate the price


Edit: Assuming 16B price.

I think you'll find that it's actually $35.55 per user.

 

[ZhanMing057]

LOL. I use Wechat and Whatsapp, one for friends in China and the US, the other mostly for people in HK/Japan.

WeChat is simply, well, better. More ways to add friends, better friend management system, an almost unlimited number of emoticon packages.etc It's also completely free, while Whatsapp requires a subscription fee after the first year. All the people I know who use both prefer WeChat, and I know a number of people incredibly hostile to technology using WeChat, such as some of the older professors at the university I work at.

I don't understand why any company would pay $16 million for the app, let alone 16 billion. As someone mentioned above, that's about $3 per user, most of which just use it for the occasional message.

Edit: About $35 per user. I don't know what to say.

 

[Derrek]

It couldn't last, sadly. Whatsapp had no real revenue, and no real way to start earning money. When they start charging everybody for using the service, everybody walks. Same if they where to start serving ads.
I guess Facebook will enjoy the extra data.

So what good alternatives are there, not (yet) owned by enormous corporations that already know too much about everybody?

 

[gbjbaanb]

Just had a look at telegram - encrypted messages, fast, distributed, open api (love the image they used to describe this feature), free and open source and can send completely secret and self destruct messages. Sounds like the perfect messaging app, and I am certainly going to give it a go.

 

[wicker_man]

No, no, no!!!!! FFS, this was the only popular app that did one thing well and with at least some sort of privacy. At the same time it also had a business model that didn't rip off users. Fuck you sincerely, Facebook.

 

[nibb]

NO !!!!!!!!

Time to move....

Is there anywhere we are going to stay safe and private? Back to old sms I guess.

Or maybe its proper time to use the blackberry BB which is also available in other platforms like Android.
https://play.google.com/store/apps/deta ... .bbm&hl=en

At least we are going to have privacy. Facebook is going to destroy Whatsapp like with anything else they touch.

 

[Geral]

Who can first adapt Austin Powers to Facebook purchasing WhattsApp?
https://www.youtube.com/watch?v=jTmXHvGZiSY

 

[MaxArt]

Oh, what the hell!
I just friggin' want to stay away from Facebook as much as possible!

 

[caseyjohnston]

DSF1942[/url]":3tidstuj]WSJ and a few others are reporting the deal at 19 Billion with cash and stock.

http://online.wsj.com/news/articles/SB1 ... 2029288302

Yes, as I stated in the first paragraph, the initial outlay is for $16 billion in cash and stock, with an additional $3 billion that will vest over four years.

 

[daneren2005]

Hot damn I'm in the wrong business. Time to startup a social services company.