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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 av
by 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 agoit'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 agodon'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 agoTrue. 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.)
- nilkn 13y agoFB messenger isn't a replica precisely because it ties into FB. WhatsApp made it a point to be extremely easy to sign up for and to not require any other major social media accounts. Somewhat ironically, Facebook may have been more successful in replicating WhatsApp if they had also made a messenger that was not connected at all with Facebook other than its corporate origins.
- mkr-hn 13y agoThis seemed to work for AIM and AOL.
- panarky 13y agoOr you could build the app and pay each user $1 every month that they're active. You could pay 450M users a dollar a month for 3.5 years, then let network effects lock them in.
- rayiner 13y agoFacebook could've even paid users in Facebook stock to use their all instead of WhatsApp.
- User8712 13y agoWell, buying WhatsApp for 16B is a guarantee they're no longer a competitor and you have their entire audience. Your plan takes 3.5 yrs longer, and it has a high chance of failure.
- objclxt 13y ago> They've seen how quickly a social network can dry up and are wisely using their capital to avoid ending up like myspace. ...they're using their capital to buy more users. There is no evidence that those users will remain with WhatsApp. They're not "avoiding ending like myspace", they are simply delaying ending up like MySpace. No messaging product has managed to maintain a dominant position over the past fifteen years - they come, and they go. I don't see how buying WhatsApp diversifies Facebook's portfolio, because WhatsApp competes with Facebook for messaging users. Google buying Nest is a diversifying acquisition, because it brings in talent and expertise that Google doesn't have (hardware design and engineering). The only thing that WhatsApp brings to the table is users, users who use WhatsApp instead of Facebook Messenger.
- amirmc 13y agoWhatsapp made a huge effort to make sure you could use it from almost any device. FB less so. Not really much of a 'competition' in that sense.