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For everyone saying this is a waste of money, consider the commentary around Instagram at $1B. Basically the world said that this was a horrible acquisition at
by josh2600 13y ago
For everyone saying this is a waste of money, consider the commentary around Instagram at $1B. Basically the world said that this was a horrible acquisition at the time, but in retrospect, buying Instagram was quite cheap. Buying your closest competitor for less than 15% of your market cap is usually a good idea.
Fast forward to today. What'sapp is the dominant messaging application across the world. Carriers hate it but they can't do anything to stop it. Facebook hates it and no matter how much they improve facebook messenger, they keep falling behind.
This represents a massive existential threat to Facebook's business: engagement. To kill their closest competitor for, again, less than 15% of the company, is a rational decision.
Since Viber and What'sapp have both exited the market, I think it's time for someone to build a new messaging app. There's a lot of room in a once incredibly crowded space.
- TylerE 13y agoI'm not sure that sort of relativism makes sense. Making a really bad purchase doesn't make your earlier merely bad purchases less bad.
- georgemcbay 13y agoDon't worry, when they pay $25B for Snapchat this will also seem cheap!
- peteforde 13y agoYou really think Instagram was a bad purchase.
- TylerE 13y agoIn so much as none of this handy-wavey social business models have ever proven to have sustainable profitability, yes.
- flyinglizard 13y agoNo one can tell, really. Arguably, Instagram was bought for what it could have been, not for what it was.
- shawabawa3 13y agoHas it made any revenue at all? Let alone 1B? Are they even getting more users?
- kayoone 13y agowhy ? viber and whatsapp are still there and will be in the future, i dont see new room for a messaging app.
- orbifold 13y agoSome years ago the dominant messaging apps were icq and aol messenger and msn messenger. I think almost every new generation just uses their own messenger.
- pbhjpbhj 13y agoPresumably IPv6 will be a major change - that will allow every person to have an IP address for every device they have and retain that perpetually. Then we can have true direct messaging and use open protocols (XMPP?) each person choosing a client to manage their end; like how email works now. If you can send from Whatsapp to FB messenger, Viber, Skype and whatever - and vice versa - that's surely going to democratise messaging?
- lsc 13y ago>that will allow every person to have an IP address for every device they have and retain that perpetually. Wait... what? has someone implemented IP address portability while I wasn't looking? I mean, there was lots of talk a few years back, but my understanding is that the facts on the ground are such that when you switch ISPs, well, you are switching your IPv6 address (unless you are large enough to speak BGP)
- pbhjpbhj 13y agoOK, yes, "retain continuity of addressability for every device" then - you'll need something at your end to push a signed notification out indicating your IP address change but there's no reason that can't be seamless like texting your contacts a new phone number but without any interaction needed.
- 13y ago
- flyinglizard 13y agoYour argument makes perfect sense when you're talking about real companies, with R&D, marketing, technology and all that. GM buying Tesla for 15% of its worth might make sense. But in the social space, companies are entirely seasonal, the barriers to entry are none, there's no way to predict user traction or behavior. I understand this is how Facebook intends to keep itself at the top of the social heap, but with recent valuations (starting at Instagram), it'll be incredibly difficult to maintain this for long.
- frandroid 13y agoFacebook and Twitter are seasonal?
- lancewiggs 13y agoWhere the seasons extend over a few years - yes. MySpace, Friendster, Slashdot, Hotmail etc. were the same.
- shill 13y agoCyclical
- patrickk 13y agoCyclical means they'll come back up. Somehow I doubt that's the case with MySpace, bebo etc.
- chockablock 13y agoYeah but seasonal implies a (yearly) cycle too. Plants that die completelyaway at the end of each growing season are called 'Annuals' (vs. perennials), but I think that term would be too confusing to be useful ;)
- ulfw 13y agoYea like search. See altavista, goto.com, inktomi, google...
- elwell 13y agoIt also tells the next Whatsapp that they can hold out for $20B.
- adventured 13y agoHow much time is left on the party clock? I have no idea, but typically when things are getting really crazy like they are now, the clock is almost out.
- andrewfelix 13y agoIt could also be intentionally high to price others out of the market. If this is the new going rate for users, there's not many companies out there that can make acquisitions like this.
- tomasien 13y agoPlus, if FB sold Instagram to someone else (like the public) today, they'd make a massive return on 1 billion dollars. Massive.
- brown9-2 13y agoWhat is the analysis that concludes that buying Instagram for that price was cheap?
- shortsightedsid 13y agoThe only thing that Facebook does not have today (post acquisition) is a good Video Conferencing app. That's the only reason why I use Google Plus - for Google Hangouts. A Google Hangouts competitor that has it's features (multi-party unlike Skype) would be worth building.
- skrebbel 13y agoSkype has that. Yes, it's paid, but so is Whatsapp.
- adnam 13y ago> I think it's time for someone to build a new messaging app And that it precisely what I am helping to do! We have built a Whatsapp-style messenger, with the added benefit of being able to make free calls to US, Canadian and UK numbers. We also launched a data-SIM plan last week for $15/month. Check it out: http://upptalk.com http://upptalk.com and http://uppwireless.com http://uppwireless.com