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FB didn't spend $19B for a texting app. They spent $19B for a huge userbase in parts of the world where FB doesn't have much market share. (And one with conside
by jey 13y ago
FB didn't spend $19B for a texting app. They spent $19B for a huge userbase in parts of the world where FB doesn't have much market share. (And one with considerable network effects leading to significant switching costs.)
I expect there to be some kind of onboarding of the WhatsApp customer base onto FB as smartphones get adopted in those parts of the world.
- PhantomGremlin 13y agoI know it was more than a texting app. Since this story was about Intel not Facebook I probably shouldn't have thrown that line in. But here's why I did: I'm sure there are all kinds of arguments, explanations, justifications, rationalizations (call it what you will) for FB's purchase of WhatsApp. But my gut feel is that it's not worth paying 1000x TTM revenues for it. Admittedly a large part of the price was in stock not cash. Same with Intel's purchase. My gut feel is they shouldn't be buying a watch company. Intel has an abysmal track record with acquisitions. I think it's a sign that they're desperately flailing around. I'd rather see them try to become a world class foundry. They certainly have the technology and expertise, and it's much closer to the CEO's background. I.e. "stick to the knitting".