Facebook Buying Messaging App WhatsApp for $16 Billion

[otherguy41]

Whatsapp has 450 million users. BBM has like 45 users.

Or closer to 100 million BBM users....but you were close. I'm curious how whatsapp defines "active" users. I have an account but haven't used it in a year. I use bbm now along with a ton of my friends.

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What a dumb comment... How do I send a photo in a chat to an Android user for free? Don't say SMS cause it doesn't send photos.

Simple. Use bbm or kik

 

[mambodancer]

So Facebook hasn't the talent to produce an app with that functionality on their own without spending $16B? That's just sad.

 

[typeadam]

Maybe I'm not being objective enough but Facebook to me seems like a toy. And Facebook buying anything (especially an internationally used app like WhatsApp) tells me that WhatsApp's days are numbered - at least its "serious" days.
Not everyone has Facebook. And those that do, don't all wish it was integrated with everything they use. I can't take Facebook or their products seriously. Their image is so...so........immature!

 

[JGIGS]

Technically its one of the best messaging apps since its cross platform since its available on every mobile platform. To bad the geniuses at whatsapp never came up with with a pc/mac app or web based app or I'd still be using it.

At this point Hangouts is what I mainly use because most of my friends have either an iphone or Android phone. I have to stranglers using blackberries. I just need to get them to port the android version and hopefully I'll have all my bases covered.

To bad apple doesn't release imessage cross platform. I would prefer to use that.

 

[drewyboy]

Yes this part of the Social Media bubble and yes it will burst. Just think about this for a minute. 16 BILLION dollars for an IM app. That's it. How ludicrous is that?

As far as those using it, my guess is 4/5 are young under 30 somethings, and most are probably outside the USA. My assumption on the younger crowd is that the older crowd usually doesn't need/want to keep up with the "latest" IM app.

I'm a mid 20 something in the US. I've tried some apps like this like Bump when they were "hot" but getting other people to use it and then shift to another one, then another, and another.... It's tiresome. Majority of people just want stuff to work out of box.

Would you pay 16 BILLION for a "trending" email service?

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Technically its one of the best messaging apps since its cross platform since its available on every mobile platform.

I once heard of this thing called email. It was an amazing tool that I could send large messages, digital images and music, digitized forms and documents. I could also send it to a group of people! It's an amazing thing to be living in the 90's!

All jokes aside, it's just email in a "socially acceptable" format.

 

[bawbac]

Useful, productive, and fun? That's the typical response from people who are public spokespersons for the company

The amount of garbage people post, and the fact that there are so many folks who don't realize how much personal information is exposed is just crazy.

May be you need to unfriend people if people are posting garbage in your feed. You can also move people to other groups that can sort of be ignored and not show up in your main feed.

It's really easy to unfriend someone and they won't even know but then it deducts from your friend total, which then you will not obtain the #1 friend total spot.

 

[NT1440]

We are definitely in the midst of Internet Bubble 2.0.

None of these companies are worth nearly what they are being bought for.

UNLESS: The amount of data that these companies have on their users and are willing to hand over for advertising purposes is truly effective in the new micro targeting ad paradigm we live in.

I still think its a bubble. Get ready for the next recession ladies and gentlemen.

 

[adder7712]

In other news....I still don't understand why people use WhatsApp

Because not all of my friends have an iDevice.

 

[AppleScruff1]

Even when you're rich you can be an idiot. You make the simplistic suggestion by applying that being young and being rich means you can't be an idiot, that's not comical, that's just silly.

Besides, being an idiot or not within this given context is within the eye of the beholder. But one thing is sure, being rich doesn't rule out the label: being an idiot.

Personally I find internet forum users criticizing a multi-billionaires business decisions silly, but that's just me.

 

[samcraig]

Well what's app was good while it lasted. Now that is it is owned by facecrap there will tons of ads and annoying messages popping up like "would you like to add you friends " or connect your Facebook account now."

I seriously hate facecrap.

Someone that hasn't read the article or WhatsApp's blog post.

 

[mtneer]

Facebook is not buying the users or the app - they are buying "consent". With Facebook, you have to accept friend requests to build the network that Facebook can then target.

On WhatsApp; there is no consent needed. Even if you have never downloaded or even heard of WhatsApp; someone who has you on their contacts list and has downloaded WhatsApp - just gave Facebook your name, your phone number (possibly location based on that) and who else knows you in your network.

Each person, just guessing, may be listed on a couple of dozen other friends and family members phone contact list. Even if one or two of those friends has WhatsApp; or gets WhatsApp in the near future with Facebook pushing it - FB will soon have a database of almost every phone number, name and message history in the US and beyond.

That maybe worth $16 B..

 

[D.T.]

We are definitely in the midst of Internet Bubble 2.0.

None of these companies are worth nearly what they are being bought for.

UNLESS: The amount of data that these companies have on their users and are willing to hand over for advertising purposes is truly effective in the new micro targeting ad paradigm we live in.

I still think its a bubble. Get ready for the next recession ladies and gentlemen.

Great post.

I was there [way] before, during, and escaped post-implosion Bubble 1.0 with nary a scratch (I think most of us from the “old school” tech space did well). I remember talking to iXL about an acquisition and the multiplier was so ridiculous, I actually asked the AATT to repeat it like 3 times

... but you’re right, this definitely quacks like a duck and walks like a duck.

 

[NT1440]

Great post.

I was there [way] before, during, and escaped post-implosion Bubble 1.0 with nary a scratch (I think most of us from the “old school” tech space did well). I remember talking to iXL about an acquisition and the multiplier was so ridiculous, I actually asked the AATT to repeat it like 3 times

... but you’re right, this definitely quacks like a duck and walks like a duck.

Which is terrifying given both:

A) 98% of the population is still trying to claw out of the hole we've collectively fallen into in 2007/2008

B) The DEVASTATING effect the next crash will have on 401k's, the vast majority of which were almost entirely wiped out (in the context of 10+ years of saving vanished)


Wanna see real market reform in America? Tell the "soon-to-be-retiring" 40+ population FOR THE SECOND TIME IN A DECADE that they are going to have to work another 20 years to cover their second loss of retirement funds. I expect riots in the streets from the next crash, whenever it does happen (most likely right around 2016-2020).

 

[blumpy]

$84 per active user

$16 billion for 190 million active users.

That's $84 per user for a free service. How on earth are they ever going to justify this without sending direct spam advertising to everyone who uses this app and how long until they have only grandparents?

 

[kudukudu]

Acquisitions like Instagram and WhatsApp demonstrate weakness and not strength on the part of Facebook. By overpaying by such vast amounts suggests that Zuckerburg feels that Facebooks' pre-eminence is one killer app away from unraveling. No company can afford to throw this kind of cash against every challenger that comes along. Remember Nortel? They paid what was a lot of money at the time (e.g. $500 million, $800 million, etc.) for companies that had some experimental technologies with lasers, annual revenues of $1 million, etc. I am not suggesting that Facebook is going into chapter 11 like Nortel tomorrow, but seeing any company over-paying with M&A is a cause for concern.

 

[topmounter]

In other news....I still don't understand why people use WhatsApp

One can say the same thing about Facebook... seriously, it's not 2010 anymore. We should be focusing on the -next- big thing, not the last big thing.

 

[Will do good]

About $35.50 per user.

I'm not worth it.

 

[lilo777]

This price will ...

force app developers to think twice about the merits of iOS-only or iOS-first development strategy. The strategy have been all but dead for quite a while though.

 

[Pillar]

So why are some worried about privacy now that Facebook bought whatsapp? Should I be worried? I don't have Facebook, I use whatsapp to text internationally and send pictures. Will Facebook own the personal family pictures I send and will other people be able to see them?

Thanks

 

[IJ Reilly]

I'm not sure where the $16B figure came from but the actual takeover figure is $19B. Possibly the discrepancy is due to it being a cash and stock deal.

http://www.latimes.com/business/la-fi-facebook-whatsapp-20140220,0,3631001.story

Also, we learn this morning that Google offered $10B.

http://www.latimes.com/business/tec...-10-billion-whatsapp-20140220,0,7154808.story

Apple offered $0B, so by far they got best deal.

 

[dragje]

Personally I find internet forum users criticizing a multi-billionaires business decisions silly, but that's just me.

Insinuating that decissions made by multi-billionaires business can't be criticized is quite dogmatic and naive i.m.h.o. But that's just me.

At the end there are tons of examples where company directors agree that decisions being made where not that smart.

 

[cube]

I'm not sure where the $16B figure came from but the actual takeover figure is $19B. Possibly the discrepancy is due to it being a cash and stock deal.

http://www.latimes.com/business/la-fi-facebook-whatsapp-20140220,0,3631001.story

Also, we learn this morning that Google offered $10B.

http://www.latimes.com/business/tec...-10-billion-whatsapp-20140220,0,7154808.story

Apple offered $0B, so by far they got best deal.

The 3 billion difference is the Facebook stock to vest in 4 years for the WhatsApp team.

 

[D.T.]

I don't think a lot of people realize how much 16 billion really is.

Most of us wish we could have 1 million dollars in cash.
5 million would be incredible if you won it in a lottery.
100 million seems like it would fulfill every one of your dreams.
500 million would make you richer than Justin Bieber.
1 billion would be enough to make the next 2 Avatar sequels.

But 16 billion?

WhatsApp has 32 engineers on staff. That works out to $500 million per engineer.

Can you imagine if you came home with $500 million in your bank account? Not 1 million that you won in a lottery. Not 5 million. Not 50 million. Not even 100 million.

$500 million.

Now, I don't know how the money was actually divided within the company, but suffice it to say that however you divide the 16-billion pie, each person is going to walk out with millions upon millions in their bank account.

Just a general FYI, it’s not all cash:

Facebook said it would pay $4 billion in cash and $12 billion in Facebook shares for WhatsApp. An additional $3 billion in restricted stock units will be granted to WhatsApp founders and employees. Those stock units will vest over the next four years, Facebook said.

... and there are more staff than just the engineers, and there’s the founders, executive team, with what I’d suspect is a notable shareholding, and there’s possibly/likely other investors, etc.

Don’t get me wrong, I totally get the sentiment: this is a pretty stout acquisition (I sold my second company back in 2000, but it wasn’t in the parking lot of this ballpark , though fingers crossed my current startup does 1/100th this well )

 

[powers74]

Sixteen what?

About $35.50 per user.

Still don't get it.

Facebook is not buying the users or the app - they are buying "consent". With Facebook, you have to accept friend requests to build the network that Facebook can then target.

On WhatsApp; there is no consent needed. Even if you have never downloaded or even heard of WhatsApp; someone who has you on their contacts list and has downloaded WhatsApp - just gave Facebook your name, your phone number (possibly location based on that) and who else knows you in your network.

Each person, just guessing, may be listed on a couple of dozen other friends and family members phone contact list. Even if one or two of those friends has WhatsApp; or gets WhatsApp in the near future with Facebook pushing it - FB will soon have a database of almost every phone number, name and message history in the US and beyond.

That maybe worth $16 B..

... Six... Teen... Billion........ I....

 

[D.T.]

Still don't get it.

They convert each user into $100 worth of Soylent Green, so after processing costs, packaging, etc., I understand it’s about $50 net per person ...