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posted by
Dopefish
on Thursday February 20 2014, @09:00AM
from the when-will-this-darn-bubble-pop-already? dept.
from the when-will-this-darn-bubble-pop-already? dept.
lubricus writes "Facebook announced plans to acquire WhatsApp for four billion cash, plus 12 billion in Facebook shares.
Additionally, WhatsApp employees and founders will receive three billion in restricted stock which will vest in four years. Facebook also agreed to a one billion dollar break up fee.
WhatsApp says they have message volume which approaches the global SMS volume, and hope to have one billion users. Even at those figures, Facebook is paying $16 per user.
I'm guessing WhatsApp will send Snapchat developers a cake."
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Facebook to Buy WhatsApp for 16 Billion
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(Score: 5, Interesting) by Lagg on Thursday February 20 2014, @09:25AM
http://lagg.me [lagg.me] 🗿
(Score: 4, Interesting) by the_ref on Thursday February 20 2014, @09:36AM
at least the bubble is localised to facebook - so won't be a general disaster to the economy when it bursts.
But you have to shake your head at this kind of thing, and wonder what would could happen if this kind of cash was spent on real innovation.
(Score: 1) by Buck Feta on Thursday February 20 2014, @01:47PM
If we could kill Facebook, the economy might actually improve.
- fractious political commentary goes here -
(Score: 2) by SpallsHurgenson on Thursday February 20 2014, @02:45PM
Facebook is real innovation... just not in areas we'd like to see. It is innovative in how well it managed to convince people to give away all their most private details in exchange for the digital equivalent of some buttons and beads. It is innovative in getting people to waste time (and money) on some of the most mindless games ever made. It is innovative in that it does all this while at the same time being so upfront about how ruthlessly they intend to exploit their users. It's a brand new amalgamation of psychology, economics and technology, imitated by many. We may not like where it has takien us, but there can be little doubt that it was Facebook that led us here.
(Score: 5, Insightful) by girlwhowaspluggedout on Thursday February 20 2014, @09:55AM
FTFY.
Soylent is the best disinfectant.
(Score: 3, Interesting) by combatserver on Thursday February 20 2014, @10:30AM
"...any possible competition, whatever the price..."
I agree.
When you live in a house of cards, the last thing you need is someone grabbing the ones from the bottom. One missing card at the bottom is enough to bring the entire house down.
I hope I can change this later...
(Score: 3, Insightful) by geb on Thursday February 20 2014, @10:14AM
My guess is that it's selective memory in action. Someone is seeing a network, immediately thinking "network effect" and "lock in", and from there assuming that the users will be around forever.
There are plenty of cases where that is true. First to market in some new field often gets you a near-monopoly, and so it makes sense to throw money around like water in an attempt to get there first. If you go slow, somebody else will beat you to it and you get nothing.
All the examples where that hasn't worked are easy to forget, because they're not around anymore.
(Score: 4, Interesting) by Fluffeh on Thursday February 20 2014, @10:24AM
First off, WhatsApp really isn't technically awesome - but to your post, it's probably not something that many folks here would be all that interested in. Think of it as an alternate SMS/Email thing via a central server. Most people here wouldn't care about the thing - we send emails, use SMS and hang about on sites trawling and posting on forums.
What it did really well is pretend to give the average user something that they technically already had for free - but for free. See what I did there? It's basic (and brilliant) marketing. It uses data to send a message to another user who then uses their data to get it. As for the pricetag, yeah, it's probably a symptom of someone who has too much money (way too much) and doesn't know what to do with it - but on the other hand, it could also be a rather simple way to ensure that what they have stays valued at what it is. Look at MySpace - once it was the pinnacle of social media, Facebook came along and the thing is pretty much worthless. Facebook as a company might actually be rather clever here - probably overpaying for the product itself, but at the same time ensuring that IT is the social media engine that has the user base. $16 billion might be a very cheap way indeed to maintain it's own value rather than drop like MySpace... erm... a rock.
(Score: 5, Informative) by cubancigar11 on Thursday February 20 2014, @12:51PM
Ok, you have no idea about Whatsapp and most probably have never used it. As a user I will tell you why it succeeds and others like Google Chat (pre-installed on Android), GoChat, Viber etc. don't. But first, why it trumps over SMS/MMS that many of you are harping about here:
1. Whatsapp is not popular in USA but in less developed places like India and Africa. This might make you think that rest of the world is illiterate and stupid, but it is not so. You see, SMS is pretty expensive in most of the world and people are charged per SMS everywhere. So a communication between two people can very easily finish all your balance.
2. Most people have wifi in office and at home. Those who don't, instead have 2G and 3G connection. 2G is ridiculously cheap in India and enables unlimited chatting via Whatsapp. So, it is without a doubt a better alternative than SMS/MMS.
Now why it succeeded over rest of the similar services:
1. No need to create 'accounts'. Your phone number is automatically binding you uniquely to it.
2. It is 'always on' and instant and doesn't drain much battery.
3. If you are offline, it delivers messages when you come online. Moreover, it allows you to send messages to someone when he is online. Along with feedback.
4. It has a simple UI an doesn't come into way of chatting like 'status messages'.
5. The same reason Skype is successful over voipcheap etc. Critical mass.
6. It has clients for Blackberry and Symbian, which are big in most of the 3rd world.
It is easy to complain that XMPP is not succeeding, but there are not good clients of XMPP. One could have made it, but no one did. Google chat could have become simpler, but instead it became monstrous 'Hangout' which takes considerable more time to open and ties your G+ everywhere. GoChat will come if you have GoLauncher. WeChat is a Chinese app and pretty big there, but probably a copy of whatsapp. Viber is again a monster which drains battery.
(Score: 2, Informative) by aitmanga on Thursday February 20 2014, @02:19PM
As someone who lives in Mexico I can certainly attest to this. Data from some social media apps (like Twitter, Whatsapp, or Facebook) is free and since SMS cost ~1MXN you can cleary see that it's in the best interest of people to use the cheaper alternative.
Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
(Score: 2, Informative) by chown on Thursday February 20 2014, @09:22PM
One more thing to add: along with the above, whatsapp easily allows group communication. this is cumbersome with SMS, and is a lot more heavyweight with other clients. whatsapp simply lets you arbitrarily create a chat group and chat on it.
(Score: 1) by cubancigar11 on Friday February 21 2014, @04:04AM
Oh... that is a very good point!
(Score: 2, Insightful) by radu on Thursday February 20 2014, @01:57PM
> Most people here wouldn't care about the thing
> technically already had for free
Not everybody everywhere. In Germany SMS is *very* expensive, ~20-30c for *1 SMS*. Sometimes they throw in some 100 SMS/month free because "they're being nice". Or you can pay something like 10€/month for unlimited SMS.
That's far from free.
(Score: 2, Interesting) by EventH0rizon on Thursday February 20 2014, @10:44AM
> These purchases are symptoms of a bubble
Quite possibly. Or a more sobering thought, since *we* are the product from Facebook's point of view, they are betting that their near-monopoly on our graph data is worth this insane sort of money in the near future.
In a way, I hope you're right, I hope it is a bubble.
(Score: 1) by Non Sequor on Thursday February 20 2014, @11:18AM
I've heard it suggested by some kind of pundit that Microsoft should have done this sort of thing (i.e. buy up all of the startups) in order to stay relevant. It seems stupid to me because at valuations like this it's more like buying high priced lottery tickets, unless you're hubristic enough to believe that any business would benefit from your managerial insight.
Write your congressman. Tell him he sucks.
(Score: 5, Interesting) by linsane on Thursday February 20 2014, @11:35AM
Having spent a deal of time in the Middle East, its amazing how embedded WhatsApp is in both personal lives and business there, I'm sure this is the same elsewhere too but not currently the case back home where 'traditional' email / phone / mobile continues to be very much the norm for work.
While the total figure may be bubbly, the cash sum that is involved is the metric that is of considerable interest and, as with other biggies like the Instagram deal, is the bit that can't be unwound or devalued if / when a bubble goes pop.
Speaking of which: Popcorn anyone?
(Score: 1) by Koen on Thursday February 20 2014, @02:31PM
$16B for WhatsApp. Lenovo paid $2.3B for IBM's server business. Bubble indeed.
/. refugees on Usenet: comp.misc [comp.misc]
(Score: 1) by digitalaudiorock on Thursday February 20 2014, @03:43PM
Bubble isn't the word. The fact that Facebook has a market cap that's 85% of that of IBM....I mean seriously...there just are no words. They couldn't justify that price if they were allowed to print money.
(Score: 1) by TheloniousToady on Thursday February 20 2014, @06:33PM
It seems that the core values of "no ads, no gimmicks, no games" that apparently made WhatsApp so successful are the very antithesis of the core values of Facebook. It's hard to see how the purchase price could ever be recouped without turning it into something fundamentally different than what it is today - by adding ads, gimmicks, and games.