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re: Facebook buys messaging app 'Whatsapp' for $16 Billion
Posted on 2/20/14 at 10:07 am to Scoop
Posted on 2/20/14 at 10:07 am to Scoop
quote:
$19 Billion for a free messaging app ran by 55 people?
I get that it is big outside the US.
Still.
That's just goofy.
Did you miss the 400 million users part that pay $1 a year?
1
Posted on 2/20/14 at 10:22 am to htownjeep
quote:
Did you miss the 400 million users part that pay $1 a year?
To be fair, many of them probably don't pay anything. New users get a free year of service, and apparently "early adopters" continue to get free years of service.
This post was edited on 2/20/14 at 10:23 am
Posted on 2/20/14 at 10:32 am to Korkstand
quote:
To be fair, many of them probably don't pay anything. New users get a free year of service, and apparently "early adopters" continue to get free years of service.
True. It could easily be a bust. But, it could easily be a brilliant move.
LINK
quote:
WhatsApp has very low costs, so it should eventually be wildly profitable. WhatsApp currently has only 55 employees. Assuming an all-in cost of $200,000 per employee, that's a total cost base of $11 million. Let's assume WhatsApp grows to, say, 300 employees over the next few years. Then it will have a cost base of only $50-$75 million. Meanwhile, if the company's growth trajectory continues, it could easily be pulling in more than $1 billion a year of revenue in a few years. Almost all of that would be profit.
Posted on 2/20/14 at 1:10 pm to htownjeep
I don't think the price really mattered to Facebook at this point. Sure $19 billion is alot, but if you look at the structure of the deal it was about $4 billion in cash and the rest in stock and future stock options. They didn't simply write a check for $19 billion.
Facebook is looking long down the road, which young successful companies should do. They have a huge vision of being THE global communications platform, whether through online social media, SMS messaging, and I'm sure many other avenues that they haven't tapped yet. In order to be the preeminent player in global communications, acquisitions like this need to be made.
We won't know how good this deal is for another 10 years.
Facebook is looking long down the road, which young successful companies should do. They have a huge vision of being THE global communications platform, whether through online social media, SMS messaging, and I'm sure many other avenues that they haven't tapped yet. In order to be the preeminent player in global communications, acquisitions like this need to be made.
We won't know how good this deal is for another 10 years.
Posted on 2/20/14 at 1:39 pm to rintintin
If they paid this much for whatsapp I can't imagine how much wechat is going to cost. Wechat was like crack to people in China and is actually a pretty solid platform.
LINK
I wish I had bought more of Tencent holdings last summer.
quote:
WeChat is expected to bring in revenues of 6.8 billion yuan ($1.1 billion) this year and about 40% more in 2015. According to estimates by Nomura, WeChat’s average revenue per user is $7 per user, compared to $1 per user on WhatsApp. And investors seem to appreciate the extra cash flow: analysts at Barclays estimate that WeChat is valued at about $30 billion as a standalone business, or about $95 per user, easily exceeding the $19 billion and $45 per user that Facebook paid for WhatsApp.
LINK
I wish I had bought more of Tencent holdings last summer.
This post was edited on 2/20/14 at 1:41 pm
Posted on 2/21/14 at 8:17 am to lighter345
Google recently tried to buy Whatsapp for 10 billion and got turned down. I believe there were quite a few companies going after Whatsapp and FAcebook just outbid everyone.
Posted on 2/21/14 at 2:21 pm to saintforlife1
Me and most of my close friends use it. It's best for the group function. It works a ton better than the normal MMS system.
We have a nice group of 5 close friends that we use it to keep tabs on a regular basis.
It's just easier than texting, has nice built in search functions. Retains all photos posted to in and a temp box on your internal memory regardless of who posted it, etc.
Great app. Well worth $1. Also, keep in mind year 1 is free or at least was free. We've been using it for well over a year.
We have a nice group of 5 close friends that we use it to keep tabs on a regular basis.
It's just easier than texting, has nice built in search functions. Retains all photos posted to in and a temp box on your internal memory regardless of who posted it, etc.
Great app. Well worth $1. Also, keep in mind year 1 is free or at least was free. We've been using it for well over a year.
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