4 ms·

The Whatsapp acq is the WTF one, mostly because of the valuation but that is also an example of a and acquisition that fits squarely into Facebook's business mo

by netcan 13y ago

The Whatsapp acq is the WTF one, mostly because of the valuation but that is also an example of a and acquisition that fits squarely into Facebook's business model (even though it's only tangentially related to the way they make money). Did IBM or Microsoft do so much (as a percentage of market cap or earnings) acquiring. Is the tech industry abnormal in this sense. Is it new? A simple common sense idea is that Google (for example) is now a big company that should be focused on moderate growth, defending their position and paying dividends. OTOH there's some intangibles in growing and acquiring and doing new things, especially for a creative tech company. Maybe it's like empires expanding in their ascendancy and decaying as they ceded territories. I wish we could hear real opinions of people in the know without all the PR headline hunting noise.

josh2600 13y ago
The what'sapp acquisition is rational in our current economy. 1) what'sapp users are in places Facebook can't hit. Think of how intense of a data application Facebook is and think about accessing it in a country without adequate internet access. What'sapp sold for so much money because of the j2me app they wrote. 2) paying $35/user is looking about 10 years out in monetization, which is not an irrational time window at that scale. If FB can payback the cost of the what'sapp acquisition over the next 10 years, it will have been worth it (other companies make 10 year infrastructure investments all the time. Hell AT&T pours $20B into their network every year and will rip and replace most of their network every 7 years). In short, what'sapp is rational in the current game theory of our world. Evaluating the present with the rubrics of the past is a fool's errand in a bubble economy.

4 ms·

The Whatsapp acq is the WTF one, mostly because of the valuation but that is also an example of a and acquisition that fits squarely into Facebook's business mo

by netcan 13y ago

josh2600 13y ago
The what'sapp acquisition is rational in our current economy. 1) what'sapp users are in places Facebook can't hit. Think of how intense of a data application Facebook is and think about accessing it in a country without adequate internet access. What'sapp sold for so much money because of the j2me app they wrote. 2) paying $35/user is looking about 10 years out in monetization, which is not an irrational time window at that scale. If FB can payback the cost of the what'sapp acquisition over the next 10 years, it will have been worth it (other companies make 10 year infrastructure investments all the time. Hell AT&T pours $20B into their network every year and will rip and replace most of their network every 7 years). In short, what'sapp is rational in the current game theory of our world. Evaluating the present with the rubrics of the past is a fool's errand in a bubble economy.