6 ms·

Facebook's big deal shows we're back in the dot-com funny money era

65 points by TheLegace 13y ago

jmedwards 13y ago
I don't think one extraordinary data point shows anything, actually.
- allochthon 13y ago
  It's not one datapoint. Instagram, Snapchat, WhatsApp. Three smallish companies, three mind-boggling valuations. I don't think it necessarily indicates that there is a bubble, but it does sound like funny money.
  - xxchan 13y ago
    All bought (or they tried) by Facebook. That's the one data point.
    - k-mcgrady 13y ago
      Facebook weren't the only company trying to acquire those companies though. Google reportedly offered as much, maybe more than Facebook for WhatsApp.
  - bradleyjg 13y ago
    Don't forget Nest.
    - mmanfrin 13y ago
      I think Nest was a fine buy. They got a hardware company shaking up what was sort of a dead industry (name me one other brand of smoke detector), but also gets them the ability to spread Google in to the home (you're going to see full home automation from Google soon) and they got the designer of the iPod. Decent buy.
      - hippee-lee 13y ago
        Honeywell: I remember it because I bought the 'programmable' one for 199. It was a pain to program, separate programs for cooling and heating, a pain to set right and it looked, well like a beige box on my wall. When I moved and they had an ancient thermostat it was easy to pay $50 more than the above just so I could control it with a phone. Setting the program is much, much easier than the Honeywell. I think they bought best for the team as much as the product and I hope nest does sprinkler systems next in their pursuit of solving first world problems.
  - Volscio 13y ago
    Money is a lot tighter in most other deals. It's nothing like the wild west of the dotcom era where companies were formed with little more than a mission statement and they'd get pumped up. These types of financial articles are the worst because they are unable to accurately predict the future of new markets. They're the types of articles that you read a decade later and kind of pat on their head. Skepticism of an industry is one thing, but most of the time that skepticism is not coming from any type of informed or even historically accurate perspective. It's just not understanding what the current market price of things is. Which is pretty dangerous for a newspaper article writer.
  - argonaut 13y ago
    Instagram is a bad example. As far as we can see, Instagram has kept on growing and growing, and the ironic thing is that all those blog posts talking about how teens are leaving FB show them flocking to Instagram. So it was obviously a brilliant strategic move, and time will tell if it was a brilliant revenue generating move (I suspect Instagram will make buckets of money eventually, like YouTube does). The key thing to look at to see if it's a bubble is IPOs. And as far as I can see, good companies are the ones IPOing successfully, and less stellar companies (Zynga, Groupon) are getting punished.
    - bsder 13y ago
      > Instagram is a bad example. Instagram is a good example. As soon as Facebook bought it, the teens started switching to Snapchat, etc. The problem for Facebook is that to be profitable it needs to connect and make visible things that people don't want connected or made visible.
      - nemothekid 13y ago
        >the teens started switching to Snapchat huh? AFAIK I've heard nothing of the Instagram exodus, and its actually growing. Are we sure that Instagram is actually in a bad spot, or are we just praying for doom and schadenfreude?
      - girvo 13y ago
        Sigh. No they use both. Instagram has kept growing.
      - argonaut 13y ago
        The "switching" you speak of has not happened and I've never seen any numbers that back up that claim (specifically, that they're leaving Instagram in favor of Snapchat). Sure, lots of teens are using Snapchat now; doesn't mean they're leaving Instagram.
      - pswilson14 13y ago
        According to my sister (as well as all the data I've seen and the literature I've read on the subject) the usage of Snapchat and Instagram are BOTH increasing in popularity. The kids aren't as into Facebook though.
  - nl 13y ago
    Sounds like investors want to get into an area that is growing like a weed. Instagram was a great buy for Facebook (and yet people questioned it at the time). Viber sold for $900M, and no one seems to complain. WhatsApp is much more popular & growing faster.
  - mmanfrin 13y ago
    Instagram was a good buy, Snapchat didnt sell, so the last of your example was WhatsApp, the original point of this conversation.
Tycho 13y ago
I don't see much analysis of the obvious underlying motive: destroying the bargaining power (SMS) of the phone carriers, who are currently extracting vast sums of money from (mobile) Facebook users.
- foobarqux 13y ago
  Messaging apps are going to destroy SMS regardless of whether Facebook bought one or not. It doesn't give Facebook any more bargaining power.
  - Tycho 13y ago
    Facebook isn't bargaining with them directly though. This just accelerates the process.
pdevr 13y ago
The dot-com buyouts were based on hope, while this era's acquisitions are mostly based on fear - more of the defensive kind.
badman_ting 13y ago
We are, but I find it distasteful how people are reacting to this deal. I think a lot of people really don't understand exactly how popular this thing is. Who cares if people in India use it, I haven't seen it in my personal little bubble so it must be pure hype. People are taking out their feelings about other aspects of the industry and the economy on this deal. If you're one of the people bitching about how startups focus too much on the problems of rich young men, what's not to like about this? What is more broadly useful than a messaging system?
- deleted 13y ago
  [deleted]
- objclxt 13y ago
  Just because something is popular doesn't make it inherently valuable, because popularity is often fleeting. Over the past fifteen years nearly all messaging platforms have had bell-curves of popularity. MSN, ICQ, AIM, BBM. What stops users of WhatsApp from moving onto another platform? Nothing. Personally I think the deal is bad for Facebook because they've spent $16+ billion acquiring users that are ephemeral. They are not buying technology. They are not buying talent. It is purely a user buy.
- 001sky 13y ago
  This is a point well made, but ~marketable demographics are relevant to a biz based on ad revenue like FB. So it is a legit concern if new customers are dilutive from this perspective. But...and this is the big but...the what's app M&A deal seems to be purposefully orthogonal to "ad based eyeballs" both from a product and a strategic perspective. Comms svcs are actually inherently valuable in their own right (point 1) and often this value is ruined by advertising (point 2); as a result things like mobile telco is paid for by services fees rather than intrusive and manipulative advertising. Now, with those two counter-balancing points being made, the valuation question for any company (pre-IPO) with a $19B purchase price at something like 40x Revenues (assuming ~$500m/yr) is still open to legitimate "interpretation" (er, questioning). I don't think pure math questions can be dismissed out of hand on that. The one explanation that does likely have some grain of truth to it, is whether or not we are in a 'bubble'...FB is protecting its valuation. That is to say, the damage done by <in>action is likely to cost FB more than $19B if they get leap-frogged by the next major evolution in the market. So, in other words, it seems there is some logic that backs this deal with or without the bubble question really being relevant. At least to FB.
nl 13y ago
I don't know if WhatsApp is a good buy for Facebook or not. But I do remember when people cried "bubble" at Google for purchasing YouTube (after all: it was too much, it was only valuable because of illegally copied content, there are hundreds of video sites, TV companies can do the same thing), and now they look pretty silly. $16B ($1B) for a hardly profitable mobile app (video sharing site) seems stupid. $16B ($1B) for the future of telecoms (TV) world wide seems a bargain.
- diminoten 13y ago
  I can't remember where I read this, but as far as I understand, Google is still losing money on YouTube.
  - fragmede 13y ago
    "The video site should generate more than $3.6 billion in gross revenue" [in 2012] http://allthingsd.com/20120621/youtubes-gigantic-year-is-already-here-citi-says/ http://allthingsd.com/20120621/youtubes-gigantic-year-is-alr... They might still be 'losing money', but 3.6 billion/yr is plenty of money coming in.
    - username223 13y ago
      I'm not sure how this matters. I could make infinite gross revenue handing out money to people who agreed to give me half of it back right away. Call it "Bitcoin", and I could even manufacture it myself, turning the gross into net!
      - nl 13y ago
        It matters because there is a clear path to profit (unlike the "give away money" model). The market sees it like this: Their costs are high because they (Google/Youtube) are investing to support high growth. At some point the growth will taper off, and so will the investment (because you invest to support larger numbers in the future), but the money keeps rolling in. Google has deep enough pockets to invest in that for a long, long time.
m_ke 13y ago
Facebook is doing the right thing by diversifying their portfolio. They've seen how quickly a social network can dry up and are wisely using their capital to avoid ending up like myspace. If you really think about it there's not much more they can do with their original platform without upsetting some of their users. It makes much more sense for them to overpay for a product with traction than to try and spin something off of their original brand (last time they tried it with the Facebook phone it was a total flop).
- pinaceae 13y ago
  it's the 19bn$ that's completely dumb. whatsapp's entire business model is charging 1$ per month. for a little less than 19bn $ you could: - build an app doing exactly the same - run a media/marketing ad blitz - charge 50c per year. or make it for free, until whatsapp is dead. if it's about the awesome talent at whatsapp, 32 engineer can be hired for 19bn $. each one of the whatsapp members could have been acquired for less money besides the 2 founders. it makes no economic sense. as in old school economics, not the valley funny money one.
  - zht 13y ago
    don't you think that Facebook has tried this already? Facebook Messenger/Messages has a non trivial number of engineers working on it, but it still doesn't have the usage that WhatsApp does.
    - jonnathanson 13y ago
      True. It's worth adding that Facebook Messenger itself began (or was at least jumpstarted) with the acquisition of a company called Beluga in 2011. Facebook has definitely made an effort to get into this space -- not necessarily a failed effort, at that -- and it's been trying for years. The idea that "Facebook can just build its own WhatsApp and market it" is silly, especially in light of Facebook's history here. I'm not convinced $19B was a reasonable price for WhatsApp, unless, as I suspect, there was some heavy competitive bidding pressure. (Google tried to buy the company at $10B not very long ago; I'd imagine there were counteroffers between G and FB, which FB ultimately won at $19B.)
benched 13y ago
No. Things can only be wrong if they're in the past. In the present, they're anointed by the status quo effect: if it is the status quo, then it is the best of all possible worlds by reason of many armchair economics-based arguments.
audioglass 13y ago
Long time lurker, first time poster here. There are tons of factors to this deal, but here's a simplistic take. If: (Google acquires WhatsApp and builds from its existing social network of 450m active users to form a mobile version of Google+ on steroids) And: ($19Bn FB investment) minus (Actualized FB profit from WhatsApp over 10 years) is greater than (Potential lost profit to Google+WhatsApp in the social networking space) Then: Buy WhatsApp I also think its been largely undiscussed that WhatsApp was a company desperately wanted by both Google (for a, finally, serious attempt at competing in social networking) and FB (for a bunch of reasons, as well as defending against a potential Google acquisition) really helped to significantly propel this deal valuation.
- wisty 13y ago
  What if more VC money goes into niche social apps designed steal FB users?
- bradleyjg 13y ago
  Maybe I'm missing something, I've never used WhatsApp, but how do you get from it to mobile Google+ on steroids? It's text messaging (including group text messaging) over the internet. In other words a very stripped down walled garden email system -- like we had on Prodigy in the mid 80s. Once it got off college campuses, Facebook's killer app was discoverability. That guy you went to high school with? The girl you met at the party last weekend, and you only know her first name and who she came with? Your brother-in-law's brother who offhandedly mentioned that he had season tickets he wanted to split? All of them could be discovered on Facebook without having to tediously trace the chain. I'm hard pressed to see how you can have a social network without discoverability, even leaving aside the text only nature of the thing. Pictures were were Facebook's zeroth killer app, without those it never would have taken off even at Harvard.
akbar501 13y ago
WhatsApp revenue is $1/user/year for all users who have used the service > 12 months. So, revenue is somewhere south of $450 million, but certainly a 9 figure number. That's real revenue. What would be interesting is to know the gross and net margins, plus growth rates. With these numbers you could back your way into a valuation using various traditional valuation models. That said, my opinion is this deal is a mix of traditional business plus Zuckerberg's vision. The first and only time I got to hear Zuckerberg in person was at Startup School in 2013. Zuckerberg made some very interesting comments at Startup School. Basically, it was something along the lines of FB already has almost everyone who can afford a smartphone (i.e. developed markets) as a user. The next big idea is to help connect the next 6 billion people to the Internet...and then he went on to say this is an exciting idea but may not be good business. Make of that comment what you will.
- toomuchtodo 13y ago
  > The next big idea is to help connect the next 6 billion people to the Internet...and then he went on to say this is an exciting idea but may not be good business. Make of that comment what you will. Someone is only a customer if they have money to spend on your product/service/widget.
  - deleted 13y ago
    [deleted]
jw2013 13y ago
Facebook buy WhatsApp because it fears to die, much more than it wants to grow. On that point I don't think $42 a user is too much.
balls187 13y ago
Anyone remember when armchair economists would talk about the inflated P/E numbers of Google? Oh how things have changed.
pbreit 13y ago
If Facebook stock is wildly overvalued then using it as currency is reasonable.
- nly 13y ago
  Except they bought an even more worthless pile of stock with it. Compare that to Google, who gutted Motorola for its IP and then flipped it for a significant chunk of Lenovo.
codelust 13y ago
Bubble 1.0 was greed without the knowledge on how to value digital companies properly. This phase is greed even after knowing how to value digital companies properly. You will come off looking really silly if an attempt is made to make sense of all these on actuals and fundamentals.

65 points by TheLegace 13y ago

jmedwards 13y ago

I don't think one extraordinary data point shows anything, actually.

allochthon 13y ago
It's not one datapoint. Instagram, Snapchat, WhatsApp. Three smallish companies, three mind-boggling valuations. I don't think it necessarily indicates that there is a bubble, but it does sound like funny money.
- xxchan 13y ago
  All bought (or they tried) by Facebook. That's the one data point.
  - k-mcgrady 13y ago
    Facebook weren't the only company trying to acquire those companies though. Google reportedly offered as much, maybe more than Facebook for WhatsApp.
- bradleyjg 13y ago
  Don't forget Nest.
  - mmanfrin 13y ago
    I think Nest was a fine buy. They got a hardware company shaking up what was sort of a dead industry (name me one other brand of smoke detector), but also gets them the ability to spread Google in to the home (you're going to see full home automation from Google soon) and they got the designer of the iPod. Decent buy.
    - hippee-lee 13y ago
      Honeywell: I remember it because I bought the 'programmable' one for 199. It was a pain to program, separate programs for cooling and heating, a pain to set right and it looked, well like a beige box on my wall. When I moved and they had an ancient thermostat it was easy to pay $50 more than the above just so I could control it with a phone. Setting the program is much, much easier than the Honeywell. I think they bought best for the team as much as the product and I hope nest does sprinkler systems next in their pursuit of solving first world problems.
- Volscio 13y ago
  Money is a lot tighter in most other deals. It's nothing like the wild west of the dotcom era where companies were formed with little more than a mission statement and they'd get pumped up. These types of financial articles are the worst because they are unable to accurately predict the future of new markets. They're the types of articles that you read a decade later and kind of pat on their head. Skepticism of an industry is one thing, but most of the time that skepticism is not coming from any type of informed or even historically accurate perspective. It's just not understanding what the current market price of things is. Which is pretty dangerous for a newspaper article writer.
- argonaut 13y ago
  Instagram is a bad example. As far as we can see, Instagram has kept on growing and growing, and the ironic thing is that all those blog posts talking about how teens are leaving FB show them flocking to Instagram. So it was obviously a brilliant strategic move, and time will tell if it was a brilliant revenue generating move (I suspect Instagram will make buckets of money eventually, like YouTube does). The key thing to look at to see if it's a bubble is IPOs. And as far as I can see, good companies are the ones IPOing successfully, and less stellar companies (Zynga, Groupon) are getting punished.
  - bsder 13y ago
    > Instagram is a bad example. Instagram is a good example. As soon as Facebook bought it, the teens started switching to Snapchat, etc. The problem for Facebook is that to be profitable it needs to connect and make visible things that people don't want connected or made visible.
    - nemothekid 13y ago
      >the teens started switching to Snapchat huh? AFAIK I've heard nothing of the Instagram exodus, and its actually growing. Are we sure that Instagram is actually in a bad spot, or are we just praying for doom and schadenfreude?
    - girvo 13y ago
      Sigh. No they use both. Instagram has kept growing.
    - argonaut 13y ago
      The "switching" you speak of has not happened and I've never seen any numbers that back up that claim (specifically, that they're leaving Instagram in favor of Snapchat). Sure, lots of teens are using Snapchat now; doesn't mean they're leaving Instagram.
    - pswilson14 13y ago
      According to my sister (as well as all the data I've seen and the literature I've read on the subject) the usage of Snapchat and Instagram are BOTH increasing in popularity. The kids aren't as into Facebook though.
- nl 13y ago
  Sounds like investors want to get into an area that is growing like a weed. Instagram was a great buy for Facebook (and yet people questioned it at the time). Viber sold for $900M, and no one seems to complain. WhatsApp is much more popular & growing faster.
- mmanfrin 13y ago
  Instagram was a good buy, Snapchat didnt sell, so the last of your example was WhatsApp, the original point of this conversation.

Tycho 13y ago

I don't see much analysis of the obvious underlying motive: destroying the bargaining power (SMS) of the phone carriers, who are currently extracting vast sums of money from (mobile) Facebook users.

foobarqux 13y ago
Messaging apps are going to destroy SMS regardless of whether Facebook bought one or not. It doesn't give Facebook any more bargaining power.
- Tycho 13y ago
  Facebook isn't bargaining with them directly though. This just accelerates the process.

pdevr 13y ago

The dot-com buyouts were based on hope, while this era's acquisitions are mostly based on fear - more of the defensive kind.

badman_ting 13y ago

We are, but I find it distasteful how people are reacting to this deal. I think a lot of people really don't understand exactly how popular this thing is. Who cares if people in India use it, I haven't seen it in my personal little bubble so it must be pure hype. People are taking out their feelings about other aspects of the industry and the economy on this deal. If you're one of the people bitching about how startups focus too much on the problems of rich young men, what's not to like about this? What is more broadly useful than a messaging system?

deleted 13y ago
[deleted]
objclxt 13y ago
Just because something is popular doesn't make it inherently valuable, because popularity is often fleeting. Over the past fifteen years nearly all messaging platforms have had bell-curves of popularity. MSN, ICQ, AIM, BBM. What stops users of WhatsApp from moving onto another platform? Nothing. Personally I think the deal is bad for Facebook because they've spent $16+ billion acquiring users that are ephemeral. They are not buying technology. They are not buying talent. It is purely a user buy.
001sky 13y ago
This is a point well made, but ~marketable demographics are relevant to a biz based on ad revenue like FB. So it is a legit concern if new customers are dilutive from this perspective. But...and this is the big but...the what's app M&A deal seems to be purposefully orthogonal to "ad based eyeballs" both from a product and a strategic perspective. Comms svcs are actually inherently valuable in their own right (point 1) and often this value is ruined by advertising (point 2); as a result things like mobile telco is paid for by services fees rather than intrusive and manipulative advertising. Now, with those two counter-balancing points being made, the valuation question for any company (pre-IPO) with a $19B purchase price at something like 40x Revenues (assuming ~$500m/yr) is still open to legitimate "interpretation" (er, questioning). I don't think pure math questions can be dismissed out of hand on that. The one explanation that does likely have some grain of truth to it, is whether or not we are in a 'bubble'...FB is protecting its valuation. That is to say, the damage done by <in>action is likely to cost FB more than $19B if they get leap-frogged by the next major evolution in the market. So, in other words, it seems there is some logic that backs this deal with or without the bubble question really being relevant. At least to FB.

nl 13y ago

I don't know if WhatsApp is a good buy for Facebook or not. But I do remember when people cried "bubble" at Google for purchasing YouTube (after all: it was too much, it was only valuable because of illegally copied content, there are hundreds of video sites, TV companies can do the same thing), and now they look pretty silly. $16B ($1B) for a hardly profitable mobile app (video sharing site) seems stupid. $16B ($1B) for the future of telecoms (TV) world wide seems a bargain.

diminoten 13y ago
I can't remember where I read this, but as far as I understand, Google is still losing money on YouTube.
- fragmede 13y ago
  "The video site should generate more than $3.6 billion in gross revenue" [in 2012] http://allthingsd.com/20120621/youtubes-gigantic-year-is-already-here-citi-says/ http://allthingsd.com/20120621/youtubes-gigantic-year-is-alr... They might still be 'losing money', but 3.6 billion/yr is plenty of money coming in.
  - username223 13y ago
    I'm not sure how this matters. I could make infinite gross revenue handing out money to people who agreed to give me half of it back right away. Call it "Bitcoin", and I could even manufacture it myself, turning the gross into net!
    - nl 13y ago
      It matters because there is a clear path to profit (unlike the "give away money" model). The market sees it like this: Their costs are high because they (Google/Youtube) are investing to support high growth. At some point the growth will taper off, and so will the investment (because you invest to support larger numbers in the future), but the money keeps rolling in. Google has deep enough pockets to invest in that for a long, long time.

m_ke 13y ago

Facebook is doing the right thing by diversifying their portfolio. They've seen how quickly a social network can dry up and are wisely using their capital to avoid ending up like myspace. If you really think about it there's not much more they can do with their original platform without upsetting some of their users. It makes much more sense for them to overpay for a product with traction than to try and spin something off of their original brand (last time they tried it with the Facebook phone it was a total flop).

pinaceae 13y ago
it's the 19bn$ that's completely dumb. whatsapp's entire business model is charging 1$ per month. for a little less than 19bn $ you could: - build an app doing exactly the same - run a media/marketing ad blitz - charge 50c per year. or make it for free, until whatsapp is dead. if it's about the awesome talent at whatsapp, 32 engineer can be hired for 19bn $. each one of the whatsapp members could have been acquired for less money besides the 2 founders. it makes no economic sense. as in old school economics, not the valley funny money one.
- zht 13y ago
  don't you think that Facebook has tried this already? Facebook Messenger/Messages has a non trivial number of engineers working on it, but it still doesn't have the usage that WhatsApp does.
  - jonnathanson 13y ago
    True. It's worth adding that Facebook Messenger itself began (or was at least jumpstarted) with the acquisition of a company called Beluga in 2011. Facebook has definitely made an effort to get into this space -- not necessarily a failed effort, at that -- and it's been trying for years. The idea that "Facebook can just build its own WhatsApp and market it" is silly, especially in light of Facebook's history here. I'm not convinced $19B was a reasonable price for WhatsApp, unless, as I suspect, there was some heavy competitive bidding pressure. (Google tried to buy the company at $10B not very long ago; I'd imagine there were counteroffers between G and FB, which FB ultimately won at $19B.)

benched 13y ago

No. Things can only be wrong if they're in the past. In the present, they're anointed by the status quo effect: if it is the status quo, then it is the best of all possible worlds by reason of many armchair economics-based arguments.

audioglass 13y ago

Long time lurker, first time poster here. There are tons of factors to this deal, but here's a simplistic take. If: (Google acquires WhatsApp and builds from its existing social network of 450m active users to form a mobile version of Google+ on steroids) And: ($19Bn FB investment) minus (Actualized FB profit from WhatsApp over 10 years) is greater than (Potential lost profit to Google+WhatsApp in the social networking space) Then: Buy WhatsApp I also think its been largely undiscussed that WhatsApp was a company desperately wanted by both Google (for a, finally, serious attempt at competing in social networking) and FB (for a bunch of reasons, as well as defending against a potential Google acquisition) really helped to significantly propel this deal valuation.

wisty 13y ago
What if more VC money goes into niche social apps designed steal FB users?
bradleyjg 13y ago
Maybe I'm missing something, I've never used WhatsApp, but how do you get from it to mobile Google+ on steroids? It's text messaging (including group text messaging) over the internet. In other words a very stripped down walled garden email system -- like we had on Prodigy in the mid 80s. Once it got off college campuses, Facebook's killer app was discoverability. That guy you went to high school with? The girl you met at the party last weekend, and you only know her first name and who she came with? Your brother-in-law's brother who offhandedly mentioned that he had season tickets he wanted to split? All of them could be discovered on Facebook without having to tediously trace the chain. I'm hard pressed to see how you can have a social network without discoverability, even leaving aside the text only nature of the thing. Pictures were were Facebook's zeroth killer app, without those it never would have taken off even at Harvard.

akbar501 13y ago

WhatsApp revenue is $1/user/year for all users who have used the service > 12 months. So, revenue is somewhere south of $450 million, but certainly a 9 figure number. That's real revenue. What would be interesting is to know the gross and net margins, plus growth rates. With these numbers you could back your way into a valuation using various traditional valuation models. That said, my opinion is this deal is a mix of traditional business plus Zuckerberg's vision. The first and only time I got to hear Zuckerberg in person was at Startup School in 2013. Zuckerberg made some very interesting comments at Startup School. Basically, it was something along the lines of FB already has almost everyone who can afford a smartphone (i.e. developed markets) as a user. The next big idea is to help connect the next 6 billion people to the Internet...and then he went on to say this is an exciting idea but may not be good business. Make of that comment what you will.

toomuchtodo 13y ago
> The next big idea is to help connect the next 6 billion people to the Internet...and then he went on to say this is an exciting idea but may not be good business. Make of that comment what you will. Someone is only a customer if they have money to spend on your product/service/widget.
- deleted 13y ago
  [deleted]

jw2013 13y ago

Facebook buy WhatsApp because it fears to die, much more than it wants to grow. On that point I don't think $42 a user is too much.

balls187 13y ago

Anyone remember when armchair economists would talk about the inflated P/E numbers of Google? Oh how things have changed.

pbreit 13y ago

If Facebook stock is wildly overvalued then using it as currency is reasonable.

nly 13y ago
Except they bought an even more worthless pile of stock with it. Compare that to Google, who gutted Motorola for its IP and then flipped it for a significant chunk of Lenovo.

codelust 13y ago

Bubble 1.0 was greed without the knowledge on how to value digital companies properly. This phase is greed even after knowing how to value digital companies properly. You will come off looking really silly if an attempt is made to make sense of all these on actuals and fundamentals.