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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: 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.