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To be fair, WhatsApp has an incredible number of very active users. It's not like the companies in 1998/99 which had no revenue, no users, but spent millions on

by nilkn 13y ago

To be fair, WhatsApp has an incredible number of very active users. It's not like the companies in 1998/99 which had no revenue, no users, but spent millions on Super Bowl ads. That said, this is a staggering amount to pay. I'm not familiar with Facebook's financials, but I'm surprised they could even afford this. I'd chalk this up to Zuckerberg's paranoia about no longer being #1 and less to a bubble.

adventured 13y ago
WhatsApp has no serious revenue, the valuation is similar to the dotcom bubble in financial terms. Companies in 1998/99 weren't lacking in users. ICQ was purchased for $400 million in mid 1998, and had over 80 million users a year later (over 100 million by 2001). It too was run by a thin team, of just 70 people total (quite the accomplishment considering the technology of the time).
- nilkn 13y ago
  Perhaps you're right. I was thinking more of companies like Pets.com and less of ICQ, though obviously ICQ is a much more direct analogue to WhatsApp today.
teacup50 13y ago
> It's not like the companies in 1998/99 which had no revenue, no users, but spent millions on Super Bowl ads. It's not? They had users back then, too.
- nilkn 13y ago
  I do not know who "they" is referring to in this post.
gutnor 13y ago
You would hope that from one bubble to the other people learn something. The last bubble, people thought than making stuff available online was enough (Do X but on the internet). The first crisis taught us you need to have an actual business model and a way to acquire client. But then, Google happened. Big user base can be monetized. So we have a second bubble where acquisition of user is the main driver, with the assumption than like google they will find a way to milk their users. At some point that bubble will explode too.
- tostitos1979 13y ago
  Big user base monetization = ads. Are mobile ad cpi's really that high?
  - kunaalarya 13y ago
    Yes. $2-3 for games for quality users, and going up significantly once there's a mobile payments solution that works.
BogdanCalin 13y ago
Of course they can afford this. Facebook has currently a market cap of $173.35B (https://www.google.com/finance?q=FB https://www.google.com/finance?q=FB) They spent on WhatsApp $4B (cash) and $(12+3)B (in stock). $12B is nothing when you have $173B. If the $173B evaluation is correct, it's a totally different story. But as long as people think it's correct, Facebook can profit and buy any competitor with investor's money.

by nilkn 13y ago

adventured 13y ago

WhatsApp has no serious revenue, the valuation is similar to the dotcom bubble in financial terms. Companies in 1998/99 weren't lacking in users. ICQ was purchased for $400 million in mid 1998, and had over 80 million users a year later (over 100 million by 2001). It too was run by a thin team, of just 70 people total (quite the accomplishment considering the technology of the time).

nilkn 13y ago
Perhaps you're right. I was thinking more of companies like Pets.com and less of ICQ, though obviously ICQ is a much more direct analogue to WhatsApp today.

teacup50 13y ago

> It's not like the companies in 1998/99 which had no revenue, no users, but spent millions on Super Bowl ads. It's not? They had users back then, too.

nilkn 13y ago
I do not know who "they" is referring to in this post.

gutnor 13y ago

You would hope that from one bubble to the other people learn something. The last bubble, people thought than making stuff available online was enough (Do X but on the internet). The first crisis taught us you need to have an actual business model and a way to acquire client. But then, Google happened. Big user base can be monetized. So we have a second bubble where acquisition of user is the main driver, with the assumption than like google they will find a way to milk their users. At some point that bubble will explode too.

tostitos1979 13y ago
Big user base monetization = ads. Are mobile ad cpi's really that high?
- kunaalarya 13y ago
  Yes. $2-3 for games for quality users, and going up significantly once there's a mobile payments solution that works.

BogdanCalin 13y ago

Of course they can afford this. Facebook has currently a market cap of $173.35B (https://www.google.com/finance?q=FB https://www.google.com/finance?q=FB) They spent on WhatsApp $4B (cash) and $(12+3)B (in stock). $12B is nothing when you have $173B. If the $173B evaluation is correct, it's a totally different story. But as long as people think it's correct, Facebook can profit and buy any competitor with investor's money.