I just can't get my head around that valuation. For something that's basically a feature, when they already have that functionality baked in, built out to a similar scale?
It's not an acquisition for talent, or technology, so what is it? It's an acquisition for investors probably. To argue back against the people who say the kids are leaving FB. Well guess what, we BOUGHT the thing the kids are using. And it's 'mobile first'.
They can probably continue to buy the 'cool app of the week' for the rest of their existence. Probably not at THIS scale, but certainly the $1-2b range. The rest of their user base is pretty solid. As long as they can show their advertisers that they're appealing to young people too, it's probably a strong plan.
They just really screwed up on messaging, and let these guys grow too big before deciding or being in a position to buy them. Doubt they'll let it happen again! They'll have their eyes open and will snap up ANY new apps that show strong user growth in younger markets.
Tech people have a major bee in their bonnet about Facebook. We kinda assume the kids are flocking away for the same reason we are: privacy. But it's not. Kids just get bored easily so they like to try new things. Young people aren't 'leaving' Facebook, they're just using other stuff alongside it. Facebook just has to provide one or two interesting buzzy distraction apps to last until the kids turn into adults, get jobs, and use Facebook exclusively again because it's where everyone is, and they don't have time for 15 separate apps any more.
True, if they're going to toss around this kind of money, they should be buying earlier. I mean, if WhatsApp was worth 50 million a few years ago, they could buy 320 similar companies at that stage, totaling 16B. Basically anyone that gains traction, they could throw a couple hundred million towards and buy them out.
They acquired the attention. WhatsApp created the expectation in a half billion people that they will help them exchange messages with friends and coworkers. That expectation is what is being valued. If Facebook could steal just that expectation and change it from 'WhatsApp' to 'Facebook Messenger' in peoples' heads then WhatsApp would be worth $0 to them.
It's not an acquisition for talent, or technology, so what is it? It's an acquisition for investors probably. To argue back against the people who say the kids are leaving FB. Well guess what, we BOUGHT the thing the kids are using. And it's 'mobile first'.
They can probably continue to buy the 'cool app of the week' for the rest of their existence. Probably not at THIS scale, but certainly the $1-2b range. The rest of their user base is pretty solid. As long as they can show their advertisers that they're appealing to young people too, it's probably a strong plan.
They just really screwed up on messaging, and let these guys grow too big before deciding or being in a position to buy them. Doubt they'll let it happen again! They'll have their eyes open and will snap up ANY new apps that show strong user growth in younger markets.
Tech people have a major bee in their bonnet about Facebook. We kinda assume the kids are flocking away for the same reason we are: privacy. But it's not. Kids just get bored easily so they like to try new things. Young people aren't 'leaving' Facebook, they're just using other stuff alongside it. Facebook just has to provide one or two interesting buzzy distraction apps to last until the kids turn into adults, get jobs, and use Facebook exclusively again because it's where everyone is, and they don't have time for 15 separate apps any more.