Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Eliminate costly downtime!
Find out how with Free White Paper
& enter to win a Samsung Galaxy Note

www.apc.com
World Wide Web
Real-time info services with Neustar
Average Rating:
Rate this article:  
Is WhatsApp Really Worth $19B to Facebook?
Is WhatsApp Really Worth $19B to Facebook?

By Jennifer LeClaire
February 20, 2014 10:06AM

    Bookmark and Share
Can Facebook make money off the $19 billion it’s paying for WhatsApp? How many of its 450 million users are net new to Facebook? How can Facebook convert those users into recurring revenue? Assuming all 450 million WhatsApp users pay $1 a year, it could break even in about 40 years. By that time, Mark Zuckerberg should have outgrown his hoodies.
 



As it continues its evolution in a mobile era, Facebook is making another blockbuster acquisition. The social media giant just grabbed WhatsApp for $19 billion.

WhatsApp is a fast-growing cross-platform mobile messaging company. The sale price is $16 billion, including $4 billion in cash and about $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp's founders and employees that will vest over four years after the deal closes.

"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg, Facebook founder and CEO. "I've known Jan for a long time and I'm excited to partner with him and his team to make the world more open and connected."

Driving User Engagement

Here are some numbers behind WhatsApp: More than 450 million people use the service each month. Seventy percent of those people are active on the service on any given day. WhatsApp’s messaging volume is approaching the entire global telecom SMS volume. And the company is posting continued strong growth, adding more than 1 million new registered users per day.

From the outside looking it, it appears the acquisition really does support Facebook and WhatsApp’s shared mission to bring more connectivity and utility to the world by delivering core Internet services efficiently and affordably. The companies are betting the merger will help accelerate growth and user engagement across both companies.

"WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide,” said Jan Koum, co-founder and CEO of WhatsApp.

Was It a Good Buy?

Facebook likes to think it fosters an environment where independent-minded entrepreneurs can build companies, set their own directions and focus on growth while also benefiting from the social media giant’s expertise, resources and scale. The company said this approach is working well with Instagram, and WhatsApp will operate in the same manner.

We caught up with Marcus Nelson, former head of social media at Salesforce.com and current CEO of Addvocate, a social sharing platform for people at work, to get his take on the megadeal. He told us, as the CEO of a startup, he’s thrilled to see any company get $350 million per employee.

“Even so, I’m hard pressed to understand how Facebook expects to make money off that $19 billion it’s paying for WhatsApp,” Nelson said. “We don’t know how many of its 450 million users are net new to Facebook, or how Facebook can convert those users into recurring revenue. Assuming all 450 million WhatsApp users pay $1 a year, it could break even in about 40 years. By that time, Mark Zuckerberg should have outgrown his hoodies."
 

Tell Us What You Think
Comment:

Name:



APC has an established a reputation for solid products that virtually pay for themselves upon installation. Who has time to spend worrying about system downtime? APC makes it easy for you to focus on business growth instead of business downtime with reliable data center systems and IT solutions. Learn more here.


 World Wide Web
1.   U.S. Knew of NSA Data Destruction
2.   Aereo Presses Case Despite Setback
3.   Bell Labs Pushes Copper to 10 Gbps
4.   Escort Charged in Google Exec Death
5.   Google, SAP, More Fight Patent Trolls


advertisement
Radical.FM's Freemium Biz Model
Online radio startup asks for donations.
Average Rating:
Facebook Social Experiment Irks Us
Secretive test was legal, but ethical?
Average Rating:
U.S. Knew of NSA Data Destruction
British newspaper destroyed hard drives.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Report: Chinese Hackers Hit U.S. Personnel Networks
Hackers from China broke into the computer networks of the U.S. Office of Personnel Management earlier this year with the intention of accessing the files of tens of thousands of federal employees.
 
Charges: Russian Stole Data from U.S. Restaurants, Zoo
A Russian man arrested on bank fraud and other charges hacked into computers at restaurants in Washington, hundreds of other retail businesses, and even the Phoenix Zoo, authorities say.
 
Another Month, Another IE-Focused Patch Tuesday
Microsoft rolled out 59 vulnerabilities for Internet Explorer in June. But the IE-patching party is not over yet. Redmond published six new security bulletins on Tuesday; two, critical; three, important.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | Small Business | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters | XML/RSS Feed

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.