Facebook to buy WhatsApp for $19 billion

WTF is WhatsApp??? I honestly have never heard of it.

Ugh, so that’s who outbid me.

Seriously? You’ve never heard of Whatsapp? It’s what people over here usually install on their smartphones first.

It was one of the first big apps to be a good alternative to texting, sort of the BlackBerry Messenger for the non-BB users. It was a much bigger deal in the US back when the iPhone was just starting out and there was no iMessage, and unlimited texting cellphone plans weren’t the default. I made a push to get all my family members to use it instead of texting each other, with mixed results. I think it’s still a pretty big deal internationally since it doesn’t depend on phone numbers and, I assume elsewhere it might still be common to have SMS limits on your plan.

A lot of the kids I know use it, too. That or Kik Messenger. They tend to offer features that standard texting can’t (e.g., built in read receipts, emojis, etc.) without having to resort to device-locked alternatives like Hangouts or iMessage.

Of course, most of these kids do have parent-provided iPhones nowadays, so they’ve moved to iMessage in droves because, ugh, at least they’re not a bunch of Android using poors.

I may or may not have a very dim view of the youths I know.

I think it’s still a pretty big deal internationally since it doesn’t depend on phone numbers and, I assume elsewhere it might still be common to have SMS limits on your plan.

Well, Android has a bigger marketshare outside the US, me thinks. Which means many people use whatsapp to begin with. And all the iPhone users I know also use it as their primary messaging thing on their device for that very reason because there usually lots of Android/Whatsapp users among your friends - rarely anyone uses iMessage.

From FB’s announcement, “Messaging volume approaching the entire global telecom SMS volume”. Grain of salt and all that, but yes, it is apparently still A Big Deal.

Snapchat or nothing.

thass whut all teh kewl kidz r useing lolbbq u mad bro

It’s probably not that far off. Many people use whatsapp to live-chat with whomever they’re talking to. Like, a normal online conversation. Whereas SMS is mostly being used like email.

The report I read says $16B, not $19B.

WhatsApp is supposed to have around 50 employees. That means Facebook is paying $320,000,000 per head. They are completely insane. You have to give the WhatsApp CEO (or his VCs as the case may be) credit, though. How do you negotiate a deal like that when the numbers are so big they have lost all meaning, and when your company’s total revenue to date is so much less than 1% of the selling price as to be a complete joke.

In fact, this whole thing is such a bad joke, I find it hard to believe. Perhaps someone has confused their billions and their millions on the press release.

They’re not paying $320,000,000 per employee - they’re paying $37 per user.

As for the priceactually being paid: "Facebook is making the purchase in a mix of cash and stock. WhatsApp will receive $12bn in Facebook shares $4bn in cash and an additional $3bn in restricted shares that will be paid out to executives at a later date. The company will operate as an autonomous unit. "

Good point.

There are 7 billion people alive in this planet. Whatsapp charges $1/year after the first year. Assuming zero costs, it will take 3.7 years for facebook to break even with every man woman and child on this entire planet as a customer. Fucking stupid.

Of course they could change their business model, or integrate into facebook proper, etc. But that business model is a major reason why whatsapp is popular. It has no ads, and treats its users with respect.

My wife and I use WhatsApp constantly, have done for years. It’s quick, reliable and, importantly, cross-platform. If Facebook fuck it up, we will not be pleased.

Facebook has set aside $3 billion for employee retention, which is insane for that number of employees. Split evenly (and it won’t be), that’s $57 million per employee.

Same here. My wife (I’m on Android. She is on iOS). Our children. Her colleagues.

It’s such a convenient app. And I love that, unlike an SMS, you know whether your message has been read.

I will be disappointed if Facebook messes it up.

Wendelius

Fixed that for you. Facebook is a public company now and they’ll feel the pressure to make changes to justify the expense.

If anyone doubted that we’re officially in a new tech bubble, let this be your proof. Whatsapp is an important app right now, but kids will move on. Buying these companies at the absolute peak of their value is just silly.

Think about this… For less than 3x that amount they could have purchased Time Warner Cable Industries.

The true tech bubble is facebook itself, with a p/e >100. Not sure if this is more analogous to AOL buying time-warner or microsoft buying hotmail. Mix of both, really.