View Full Version : FaceBook buys WhatsApp for 19 Billion (new tech bubble?)
Yup, 19 BILLION. A new tech bubble being created? I use WhatsApp myself all the time. I hope FB does not fu&% it up too much.
Supposedly, 400 million users, 69p per annum. Adding 1m users per day... but 19 Billion???
(Reuters) - Facebook Inc will buy fast-growing mobile-messaging startup WhatsApp for $19 billion in cash and stock, as the world's largest social network looks for ways to boost its popularity, especially among a younger crowd.
The acquisition of the hot messaging service with more than 450 million users around the world stunned many Silicon Valley observers with its lofty price tag.
But it underscores Facebook's determination to win the market for messaging, an indispensable utility in a mobile era.
Combining text messaging and social networking, messaging apps provide a quick way for smartphone users to trade everything from brief texts to flirtatious pictures to YouTube clips — bypassing the need to pay wireless carriers for messaging services.
And it helps Facebook tap teens who will eschew the mainstream social networks and prefer WhatsApp and rivals such as Line and WeChat, which have exploded in size as mobile messaging takes off.
"People are calling them 'Facebook Nevers,'" said Jeremy Liew, a partner at Lightspeed and an early investor in Snapchat.
WhatsApp is adding about a million users per day, Facebook co-founder and Chief Executive Officer Mark Zuckerberg said on his page on Wednesday.
"WhatsApp will complement our existing chat and messaging services to provide new tools for our community," he wrote on his Facebook page. "Since WhatsApp and (Facebook) Messenger serve such different and important users, we will continue investing in both."
Smartphone-based messaging apps are now sweeping across North America, Asia and Europe.
"Communication is the one thing that you have to use daily, and it has a strong network effect," said Jonathan Teo, an early investor in Snapchat, another red-hot messaging company that flirted year ago with a multibillion dollar acquisition offer from Facebook.
"Facebook is more about content and has not yet fully figured out communication."
Even so, he balked at the price tag.
As part of the deal, WhatsApp co-founder and Chief Executive Officer Jan Koum will join Facebook's board, and the social network will grant an additional $3 billion worth of restricted stock units to WhatsApp's founders, including Koum.
That is on top of the $16 billion in cash and stock that Facebook will pay.
"Goodness gracious, it's a good deal for WhatsApp," Teo said.
TERMS
Shares in Facebook slid 5 percent to $64.70 after hours, from a close of $68.06 on the Nasdaq.
Facebook said on Wednesday it will pay $4 billion in cash and about $12 billion in stock in its single largest acquisition, dwarfing the $1 billion it paid for photo-sharing app Instagram.
The price paid for Instagram, which with just 30 million users was already considered overvalued by many observers at the time.
Facebook promised to keep the WhatsApp brand and service, and pledged a $1 billion cash break-up fee if the deal falls through.
Facebook was advised by Allen & Co, while WhatsApp has enlisted Morgan Stanley for the deal.
http://www.reuters.com/article/2014/02/19/us-whatsapp-facebook-idUSBREA1I26B20140219
montanadave
02-20-14, 09:49
It's all funny money to me. This forum and a couple of others are the extent of my "social networking." I don't even have a smart phone. Obviously, I'm not the target demographic here.
But I have read a few articles of late suggesting FaceBook is bleeding users, particularly young users. And the mobile market is where it's at, apparently. So I guess this makes sense if FaceBook is scrambling to stay at the head of the class.
I know one thing. If I woke up this morning with a million shares of FaceBook, I'd go to bed tonight with about 50,000.
A couple articles have come out preaching the end of facebook and how young people don't use it anymore. However they all base this on a single study done in England using an extremely small test group.
Along teens facebook growth is flat, however it continues to grow in the 18+ crowd. And is up to around 1.2 billion ACTIVE users.
http://www.businessinsider.com/why-facebook-isnt-dead-2013-12
I think the purchase of whatsappis smart. Maybe a bit overpriced but not by as much as people are saying.
montanadave
02-20-14, 10:23
Another POV: http://www.theatlantic.com/technology/archive/2014/02/why-facebook-just-spent-19-billion-on-a-messaging-app/283959/
Skype is still superior IMO being supported on all the mobile devices as WhatsApp but Skype is also supported on Windows, Mac and Linux desktops.
WhatsApp doesn't support realtime video or voice calls either.
WhatsApp is free the first year but costs $1 per year thereafter. Skype is totally free except for making land line calls.
Skype is still superior IMO being supported on all the mobile devices as WhatsApp but Skype is also supported on Windows, Mac and Linux desktops.
WhatsApp doesn't support realtime video or voice calls either.
WhatsApp is free the first year but costs $1 per year thereafter. Skype is totally free except for making land line calls.
I like Skype for some applications and WhatsApp for others. They both have their uses for me.
I like Skype for some applications and WhatsApp for others. They both have their uses for me.
Interesting. What attracts you to WhatsApp over Skype for certain uses?
I'm weary of anything associated with Facebook due to privacy concerns but then again I don't completely know what info Skype is gathering/sharing.
Interesting. What attracts you to WhatsApp over Skype for certain uses?
I'm weary of anything associated with Facebook due to privacy concerns but then again I don't completely know what info Skype is gathering/sharing.
If I'm on a comp, Skype all day. But, on a mobile, I will more likely use whatsapp. If I have wi fi, skype works find on phone. Over a cellular network, not so much. Whatsapp is connected to the persons phone number, so if they have it, easy to connect and find, vs seeing if they are on skype. whatsapp compresses photos and such and when communicating fast with people all over the world, a great tool for me.
Whatsapp is something between pure texting and Skype. Skype is great when you want to vid chat, send files, etc. but needs good pipeline. Whatsapp killed the scam that was texting for the phone companies and does not use up your data plan. Not sure how Skype effects data plan on a phone as I only use it when I have good wifi connection.
If I'm on a comp, Skype all day. But, on a mobile, I will more likely use whatsapp. If I have wi fi, skype works find on phone. Over a cellular network, not so much. Whatsapp is connected to the persons phone number, so if they have it, easy to connect and find, vs seeing if they are on skype. whatsapp compresses photos and such and when communicating fast with people all over the world, a great tool for me.
Whatsapp is something between pure texting and Skype. Skype is great when you want to vid chat, send files, etc. but needs good pipeline. Whatsapp killed the scam that was texting for the phone companies and does not use up your data plan. Not sure how Skype effects data plan on a phone as I only use it when I have good wifi connection.
I was disappointed with Skype's video chat/call quality over my 3g connection but it seems to have gotten a lot better. It's convenient sometimes but will eat your data plan. If that's what you want and WhatsApp doesn't offer it then it's a moot point.
If you're just messaging theoretically both should use a minute amount of your data plan. Six to one, half dozen to the other IMO.
It's interesting that WhatsApp is connected to a persons phone number. It's irritating sometimes to have to find somebody on Skype.
I was disappointed with Skype's video chat/call quality over my 3g connection but it seems to have gotten a lot better. It's convenient sometimes but will eat your data plan. If that's what you want and WhatsApp doesn't offer it then it's a moot point.
If you're just messaging theoretically both should use a minute amount of your data plan. Six to one, half dozen to the other IMO.
It's interesting that WhatsApp is connected to a persons phone number. It's irritating sometimes to have to find somebody on Skype.
If you're using standard texting via the phone, it can suck up your data plan quickly depending on plan, and if you're texting to different countries, can get quite expensive. Whatsapp ended all that quickly. On a phone, minus wi fi, Skype can be slow or just useless in my experience, but did get much better on a 4g network if you have it. If you have whatsapp, you go to your contacts list in your phone, and will tell you if that person has whatsapp, which works well.
whats app has text, pics, and voice message, so it's way better on all levels than standard texting, but not as good as Skype if you have a high speed pipe for it and or want vid chat.
Whatsapp killed the scam that was texting for the phone companies and does not use up your data plan. Not sure how Skype effects data plan on a phone as I only use it when I have good wifi connection.
If you're using standard texting via the phone, it can suck up your data plan quickly depending on plan, and if you're texting to different countries, can get quite expensive. Whatsapp ended all that quickly. On a phone, minus wi fi, Skype can be slow or just useless in my experience, but did get much better on a 4g network if you have it. If you have whatsapp, you go to your contacts list in your phone, and will tell you if that person has whatsapp, which works well.
whats app has text, pics, and voice message, so it's way better on all levels than standard texting, but not as good as Skype if you have a high speed pipe for it and or want vid chat.
Agreed. I meant messaging with the app, not traditional text messaging. If using the app to text, either should use your data plan but depending on whether you're just sending text or multimedia would dictate how much data. So theoretically if you are just sending plain text via the app, the data use should be minute.
Agreed. I meant messaging with the app, not traditional text messaging. If using the app to text, either should use your data plan but depending on whether you're just sending text or multimedia would dictate how much data. So theoretically if you are just sending plain text via the app, the data use should be minute.
Whatsapp fits a perfect niche for me and 400 million or so others: I'd view it as (free) texting on steroids, or a poor mans Skype. :cool:
You can also "free" text on Skype so I'm not understanding how it's a poor man's Skype.
You don't have to pay anything other than if sending textual messages on either app it will be eating your data plan.
Belmont31R
02-20-14, 12:39
Whatsapp is used mainly overseas in countries that don't have unlimited texting, and those countries aren't big on Facebook. FB wants to expand more internationally which is why Whatsapp makes sense to purchase.
In the US I don't really see a big need for all these alternative messaging services. All the major carriers here have unlimited texting plans and Android as well as iOS have built in non SMS texting. Hangouts and iMessage. Blackberry has had BBM for a while. All 3 text like an SMS as long as you're messaging someone else using the same service then resort back to SMS/MMS if not. I find that the best because I'm not going to have 5 different messaging apps on my phone because people are using all these different services.
We are on the new AT&T value plan so our 2 phones are $15 each and the iPad $10. Then the bucket of data is whatever amount of data you need. Their new 10gb pricing is $30 a month cheaper than our 6gb plan was. So basically calls and texts are the cheapest part of plans now by far and are unlimited. In other countries you have to buy texts like we used to have to which is why Whatsapp became so popular.
As far as Skype I have it but rarely use it. Call quality seems great but I'm on LTE 99% of the time. iOS 7 brought FaceTime audio as well which is just another way to do the same thing.
Also MMS doesn't count against your data. It depends on whether you have unlimited texting which is typical today even on prepaid plans.
If you're using standard texting via the phone, it can suck up your data plan quickly depending on plan, and if you're texting to different countries, can get quite expensive. Whatsapp ended all that quickly. On a phone, minus wi fi, Skype can be slow or just useless in my experience, but did get much better on a 4g network if you have it. If you have whatsapp, you go to your contacts list in your phone, and will tell you if that person has whatsapp, which works well.
whats app has text, pics, and voice message, so it's way better on all levels than standard texting, but not as good as Skype if you have a high speed pipe for it and or want vid chat.
Technically that isn't true. Standard texting doesn't use your data plan. It's just like if you pay for a set number of talk minutes you may pay for a set number of text messages and a data allowance separately.
Many plans offer unlimited talk, text or data just depending on what you want.
Belmont31R
02-20-14, 13:03
Technically that isn't true. Standard texting doesn't use your data plan. It's just like if you pay for a set number of talk minutes you may pay for a set number of text messages and a data allowance separately.
Many plans offer unlimited talk, text or data just depending on what you want.
Yep SMS does not use data as part of your plan. It's a standardized protocol for sending text as a message over cellular.
Yep SMS does not use data as part of your plan. It's a standardized protocol for sending text as a message over cellular.
Correct. It gets confusing to some because they wonder if sending pictures, video or sound clips in an MMS text counts against data but they still don't. There are a few reports of some people seeing data charges for sending MMS but that isn't supposed to be the case.
On the contrary any "app" other than your SMS/MMS app including Skype, WhatsApp, etc WILL use data. Just like email, a significant amount of data depending on the frequency and size of your images, videos and sound clips.
My stock is up 30% ytd :dance3:
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