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/biz/ - Business & Finance

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125751 No.125751[DELETED]  [Reply] [Original]

Source:wsj

My word, is Whatsapp really worth close to that much? Ive never used the service or had hardly heard of it before the buyout but what are your guys opinions on this latest purchase? Is this app really worth so much more than these other companies?

>> No.125761
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125761

19 billion

>> No.125771

>>125751
1) no it's not worth that much with maybe a couple million in revenue (I forget the number).

It's a combination of fb wanting to pee in Google's coffee, a bidding war, fb overpaying for users/potential. Apparently this is a really good messaging service, b ut mostly used outside of the U.S. Texting between countries is expensive so this is a great alternative. Obivously in the u.s. nobody cares cuz it's so big, but in the EU a lot of people are constantly in contact with people from other countries.

>> No.125807

>>125751
Add all the Google buyouts together.

>> No.125894

>>125771
they're not buying it for the revenue

they're buying it for the userbase

>> No.125903

>>125894
$50 per user worth it?

>> No.125910

>>125903
You misunderstand, they are going to sell the information obtained from the userbase to marketing companies

>> No.125920

Facebook bought Whatsapp for the same reason it perpetually changes its privacy settings, layout, profile setup, and search features well past the point where anyone is happy with the changes. It has all of this money it has made over the years through ads, apps, and through IPO and has zero fucking clue what to invest it in because there really is nowhere to go from here for the company, so it's just throwing money around at this point in an attempt to fool the public into thinking that it is growing in value.

>> No.125926

>>125751
No, it's not. FB just wanted to get rid of a competitor.

>> No.125942

>>125910
>that information is worth 19 billion.

Yeah...... You don't understand.

>> No.125972

Did we learn nothing from the 90s

>> No.125984

>>125972
You're one of the few people that realizes this is the tech bubble 2.0

>> No.126004

>>125920

Seems that way to me too. They should just start paying a dividend or something.

>> No.126021

>>125903
50$ per user in markets that haven't been saturated (yet).

>> No.126119

>WhatsApp, a site no one has ever fucking heard of, worth 11.8 times more than YouTube
I refuse to believe this.

>> No.126134

>>125984

>implying

Michael Krasney brought it up on NPR

everyone who lives inside of the Bay Area already knows what's up. It's only a matter of time before the bubble pops again and San Jose becomes Detroit. It's going to be even crazier because this time around the state government has no money because of the drought/dust bowl happening in this state.

>> No.126129

>>126119
>a site no one has ever fucking heard of
It's not a site, it's an app. And you probably would have heard of it if you had any friends to talk to on it.

>> No.126135

>>126129
App is what I meant yeah, and all my friends fucking call or text me. They don't need some random ass app to do it.

>> No.126144

>>126129
youtube is probably worth a lot more than whatsapp at this point, i gather it is not for sale though

>> No.126150

>>126135
The benefit to it before was that it was a way to text your friends without using your text messages (and use data instead), and it was useable on any phone, unlike iMessage or BBM (which is now on all of them too). Text plans have become so fucking cheap now though that it doesn't really matter anymore.

The benefit to me is texting my friends that live in other countries, or when I'm on vacation. Texting costs a lot, and if they don't have an iphone then I can't iMessage them, so I use whatsapp.

>> No.126151

>>126144

YT got bought out by Google

>> No.126167

>>126134
Silicon Valley native and current resident here. The bubble will pop or at the very least deflate, but it's not going to be anything close to what Detroit is. And good riddance. Even people making damn good money here can't afford down payments on houses.

>> No.126172

>>126167

I'm a Silicon Valley resident as well, but I think it's going to be real bad. That being said I'm also a /pol/tard and just want to see this entire place burn.

>> No.126179

>>126172
Well, admitting it is the first step.

>> No.126193

>>126179

it is, and /biz/ is slowly causing me to become less distracted by sensationalism

that being said this drought we're in is going to fuck this state raw, especially if it lasts through 2016. Either people will move away or the entire state will condense into the bay area, all I know is that my hometown in the Central Valley is basically a ghost town at this point (and rightfully so, it's a big, shitty suburban development).

polite sage for off-topic

>> No.126532

>>125942
No shit that's why he's asking.

>> No.126598

>>125751
>google -> doubledick

>> No.126609

WhatsApp is an arbitrage on SMS prices. It's a brilliant product with user growth rates that outstrip every social media platform created in the past 10 years. And it doesn't have much overlap with Facebook's userbase. So in a vacuum, it's a really smart purchase. And Facebook did pay 80% in equity with the stock is near all-time highs.

All that being said, it's still $19 billion. Damodaran had a good write-up on it. Can't link to it, so just Google "Aswath Damodaran WhatsApp"

>> No.126695

>>125751
My bet is this is a bubble of sorts and a reflection on the inflated company stock prices causes by QE. When that shit collapses it might not look like such a great buy after all. I wonder if what's app will even be the biggest buy we'll see in the next few years. Seems like there's an upward trend.

>> No.126702

>>126119

> worth 11.8 times the purchase price of YouTube

fixed that for ya.

The actual YouTube sale price was actually even lower, as a good deal of the money was earmarked for defending the numerous copyright lawsuits. It's hard to remember but pretty much every media company was suing YouTube for willful copyright infringement.

>> No.126716

>>126702
What's YouTube worth now I wonder? Seems hard to think what's app is worth a fraction of what YouTube is worth. You tube can actually get ads to peoples faces very effectively. On YouTube you actually WATCH ads instead of ignoring them as side banners or some shit. I can't see how what's app can be worth anything near that. The fact that they have to charge people $1 a year for the service aughto be a sign that there's difficulty finding other revenue streams.

>> No.126724

>>126609

shill pls

SMS is pretty much marginal now in terms of cost to the user (especially compared to data costs and caps)

>> No.126728

>>126609
Can you explain the benefit of What's App to me? What the fuck is the benefit of What's App over just plain old Skype messaging on mobiles? and that's free.

>> No.126731

>>126724

SMS is worth over $100 billion in revenue to telcos. It's huge.

>> No.126733

No, it's not worth that much. Facebook is really, REALLY overvalued and paid most of the deal off in stock, which will turn to dirt in 20 years. Google's YouTube transaction was partially stock, too, but the founders are bluechipping their way to the moon. WhatsApp folks might be living nice though I suspect they were hemorrhaging money like facebook was before it went public

>> No.126741

>>126728

WhatsApp syncs with your phone contact book, so it saves you the pain of having to manually search and add people. Which is fucking smart. Plus, just network effects. Skype messenger just isn't as popular, which makes it way less valuable as a messaging service. Google+ is a decent product, for example, but no one uses it. So who gives a shit about it.

>> No.126744

>>126716

I'm not sure, but YT is insanely important to Google in their own estimation, and has gone from being a complete drain on their finances to a mint for money. From the time internet video was a viable option, YT was always the largest by far (I think from day one it's been larger than all of its competitors combined) but there was a lot of jeering that they'd never be able to monetize it. Ha.

>> No.126755

>>126741
>Which is fucking smart.
there's a shit load of apps that do the same thing.
>Skype messenger just isn't as popular, which makes it way less valuable as a messaging service
well I get that. What's App just seems like a painfully simple app. I mean, I pretty much don't use any of that shit because SMS in my country is chip as chips, practically free almost. I also don't have to worry about sending messages to people without what's app or god forbid people without a smartphone.

>> No.126783
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126783

>>126004

>US tech companies
>dividends

>> No.126787

>>126783
>INTC
>MSFT
>CSCO

I'm pretty happy with mine.

>> No.126830

>>126755

Most apps aren't tied to your phone number. They're tied to an email address or a Facebook account or a created proprietary username. Skype, for example?

Anyway, yeah WhatsApp is pretty simple, but I think you're confusing "complex" with "good." In some sense, complexity raises the difficulty of duplication, but you're forgetting about network effects. Facebook made a knock-off of SnapChat maybe 9 months ago. It took them 2 weeks, and the product was substantially better. But no one used it, because the network effects had already set in. Or again, Google+. Facebook doesn't care about the product. It cares about the users, and user engagement. And user engagement on WhatsApp is killer: 72% of users use it at least once a day. That's obscenely high.

Again, I don't know if this justifies $19B. Probably not. But in a vacuum, it's a really logical purpose.

>> No.126916

Facebook buying users looks like desperation

>> No.126920

>>126916
or just smart business. Google, Microsoft and Apple have all done it.

>> No.126930

>>126920
Bought social media users? When have Apple and Microsoft done that?

>> No.126944

>>126930
http://www.microsoft.com/en-us/news/press/2012/jun12/06-25msyammerpr.aspx
dunno about apple.

Not that What's App is a social media platform anyways.

>> No.126957

>>126920
Even Google buying Youtube is not for the social media part it is the biggest video content delivery system and they are in they advertisement business so that purchase is justifiable on those grounds alone. Not saying they didn't capitalise on the users but that was a bonus.

>> No.126972

>>126957
it was for the users. Google already had Google video, they didn't need a content delivery system. YouTube had more market share and more content though and left Google video in the dust.

>> No.126977

>>126944

Never heard of it, it is now.

>> No.126986

>>126728
I think it's different between the US and europe. Since i have Whatsapp i have maybe written 20 or 30 regular text messages and thats since 2 years. Everyone uses Whattsapp bc it's just so much more convenient to use, especially for group conversations, picture/video/link sharing and stuff. Most people i know receive hundreds to thousands of messages a day. A friend of the family recently complained that his kids phone broke down for the weekend and after it was fixed he had more than 10k whattsapp messages on it. In like 3 days. So the user base and frequency of use is definitely there, but if that justifies 19 billion.... I'm not sure

>> No.126996

>>126977
What are you talking about? IS Skype a social media platform? because MS bought that too.

>> No.127005

>>126996
Yes, I suppose it is.

>> No.127013

They paid in US dollars and facebook stock.

>> No.127016

>>127005
Google bought at least one IM company too http://business.inquirer.net/63277/google-buys-instant-messaging-firm-meebo..

Dunno about Apple.

>> No.127029
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127029

Anyone wondering if this isn't an elaborate method of laundering money?

Like zuckerberg or some management prick paid 19billion to get a 10billion kickback?

>> No.127040

>>127016
They tried one with iTunes Ping and they have Facetime.

>> No.127054

>>127040
They didn't buy those though.

>> No.127058

>>125903
Why didn't they just make their own messaging app and pay everyone $10 to use it? Also why do people use these apps instead of texting?

>> No.127062

>>127054
I never said they did.

>> No.127068

>>127062
we're talking about companies acquiring social media companies for their user base.

>> No.127075

>>127058
the messaging apps use data connection rather than the separately metered text message.

Also they provide voice and video and picture sharing and have cross platform computer programs.

So its almost exactly like skype, you can have skype on your phone and on your computer and both work with the same account.

>> No.127076

>>127029
http://www.slate.com/articles/business/moneybox/2014/02/facebook_buys_whatsapp_zuckerberg_s_total_control_guarantees_more_buying.html

Don't discount it if you're a libtard and just see the Slate, it's an interesting article.

>> No.127079

>>127068
I know look at my ID, I was just stating what they have/had in that line.

>> No.127086

>>127079
kk