The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

Welcome to the only entrepreneur forum dedicated to building life-changing wealth.

Build a Fastlane business. Earn real financial freedom. Join free.

Join over 80,000 entrepreneurs who have rejected the paradigm of mediocrity and said "NO!" to underpaid jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence.

Free registration at the forum removes this block.

Facebook agrees to buy WhatsApp for $16 billion

A detailed account of a Fastlane process...

oddball

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
58%
Mar 8, 2011
715
417
Austin, TX
I remember when the founder posted this app on luxury4play and asked for peoples thoughts. I think apps will see a burst like the internet bubble.
This crushes the Instagram sale of $1B and the offer of $3B for Snapchat.

I hope mods don't mind me linking to another forum, I will delete it if its a problem. I just think its cool. http://www.luxury4play.com/off-topic/24177-yo-check-out-my-iphone-app-its-free-bitches.html

http://www.usatoday.com/story/tech/2014/02/19/facebook-buys-whatsapp/5617657/
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.
Last edited:

100k

Gold Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
149%
Oct 20, 2012
1,529
2,284
-_- $*"!&% <Profanity goes here/> !&%^.

No way is it worth $16 billion.
 
Last edited:

oddball

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
58%
Mar 8, 2011
715
417
Austin, TX
But it is like the internet bubble, they see an app with a lot of users (traffic for the net) but no revenue, they put some crazy valuation and figure they will worry about monetizing later.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

InLikeFlint

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
96%
Nov 19, 2012
492
471
Michigan, USA
But it is like the internet bubble, they see an app with a lot of users (traffic for the net) but no revenue, they put some crazy valuation and figure they will worry about monetizing later.

Which is why Facebook's actions can be considered slow lane - buying something with no revenue and just banking on their ability to make back what they made. Meanwhile WhatsApp turned a free app with a huge user base into $16B, very fast lane.

The contrast in this one deal is a great example of two different business mindsets.

Really cool to see, great share!
 

oddball

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
58%
Mar 8, 2011
715
417
Austin, TX
Zuckerberg may see a few angles others can't see yet.

While possible, they aren't the only ones making what seems like ridiculous valuations on apps. Facebook has a messenger app, not just a messenger feature within the app but a specific standalone app, so its nothing with the technology, it has to do with users.

Btw, forgot you were in Austin, we will have to meet up sometime.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

HappyFighter

Bronze Contributor
User Power
Value/Post Ratio
110%
Dec 29, 2013
113
124
Philippines

The-J

Dog Dad
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
264%
Aug 28, 2011
4,199
11,079
Ontario
I used to talk about how this whole thing was a bubble, etc. And it is, to some extent. Consider two years ago, that $16 billion would have been around $4 billion (look at their stock price).

But at the end of the day, even after the bubble pops and capital drains out of these companies, Zuck and Facebook are going to get their money's worth. They're buying people's data. They're buying their most intimate thoughts, their secrets, their fears. They are building a network of well over 1 billion people and have access to things that Google doesn't. With this access, this data... Facebook is learning more and more about how to sell to the people. What do these 1 billion people want? What do they like, dislike, love, hate? What do they buy? How do they use the things they buy?

They have the ability to be the most powerful force on the planet. Facebook will survive the bubble pop. Google will survive the bubble pop. All the smaller social media companies and businesses that rely on them will not. Why? Because they have an intimate relationship with a HUGE chunk of the world's population and could serve them in ways they didn't even know they wanted.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

teabag

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
72%
Jun 21, 2013
287
208
Australia
You do realise that after using Whatsapp for 1 year, you need to pay 99 cents per year there after?

https://blog.whatsapp.com/index.php/2013/07/iphone-v2-10-1-release-notes/

0.99 x 350 million users...

$346,500,000


I feel like FB is buying their users now. Just like Coca Cola... I feel a monopoly coming along.

EDIT: As of 14 February they have 400 million users.

0.99 x 400,000,000

$396,000,000
 

oddball

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
58%
Mar 8, 2011
715
417
Austin, TX
You do realise that after using Whatsapp for 1 year, you need to pay 99 cents per year there after?

https://blog.whatsapp.com/index.php/2013/07/iphone-v2-10-1-release-notes/

0.99 x 350 million users...

$346,500,000


I feel like FB is buying their users now. Just like Coca Cola... I feel a monopoly coming along.

EDIT: As of 14 February they have 400 million users.

0.99 x 400,000,000

$396,000,000

I was unaware of that, I thought it was a free app.
Also have to account for Apple's 70% cut so with those numbers it would actually be $277,200,000.
 

AllenCrawley

Legendary Contributor
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
420%
Oct 13, 2011
4,112
17,270
52
Scottsdale, AZ
I feel like FB is buying their users now.

How many of these users never had a facebook account? I'd bet very few.

But it is like the internet bubble, they see an app with a lot of users (traffic for the net) but no revenue, they put some crazy valuation and figure they will worry about monetizing later.

Zuckerberg may see a few angles others can't see yet.

Yes and I'd also speculate that facebook buying up these companies is more about user engagement than number of users. The greater the user engagement the greater the potential for monetization.
 
Last edited:

PopEmersen

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
67%
May 2, 2011
671
450
Atlanta, GA, US
I was unaware of that, I thought it was a free app.
Also have to account for Apple's 70% cut so with those numbers it would actually be $277,200,000.
I don't think u pay that .99 through Apple or Google. The app is free in their respective stores then after a year u pay through the what's app so they may get the full .99.
 

oddball

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
58%
Mar 8, 2011
715
417
Austin, TX
I don't think u pay that .99 through Apple or Google. The app is free in their respective stores then after a year u pay through the what's app so they may get the full .99.

With Apple you can't have payment methods outside the system, has to go through Apple.
 

theag

Legendary Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
297%
Jan 19, 2012
3,903
11,580
The Facebook CEO said he contacted WhatsApp's Koum on Feb. 9 to suggest the two companies combine to pursue this vision. Koum thought about it for roughly a week and expressed interest. Then the two met to discuss the price of an acquisition and arrived at the deal that was announced Wednesday.

FASTlane, literally.

Wow.
 

RyanC

New Contributor
Read Fastlane!
User Power
Value/Post Ratio
76%
Feb 6, 2014
17
13
37
Austria
I don't know anyone who ever had to pay for Whatsapp besides the initial 99 Cent on the iOS Appstore before it was free.
Therefore I don't know, how they could survive that long without being pressured by the investors to finally earn some money with their product.
I am happy for Whatsapp to close this deal. They created a fascinating but simple product which serves a very basic need and is very scalable and on the same time they could collect so much personal data.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

smarty

Gold Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
189%
Jan 2, 2013
984
1,859
Which is why Facebook's actions can be considered slow lane - buying something with no revenue and just banking on their ability to make back what they made. Meanwhile WhatsApp turned a free app with a huge user base into $16B, very fast lane
U serious? Facebook bought the user base and Whatsapp is not really without revenue, it is $1/year and considering their growth of 1 million users a day you can make the calculations where it is going. Besides that, Whatsapp is very popular end expanding quickly in second and third world countries which with time, will accelerate the growth of facebook to have a global domination. Zuck doesn't suck!

P.S.: this leaves SnapChat with a finger in the butt.
 
Last edited:

RogueInnovation

Gold Contributor
Speedway Pass
User Power
Value/Post Ratio
170%
Jul 28, 2013
1,278
2,177
-_- $*"!&% <Profanity goes here/> !&%^.

No way is it worth $16 billion.

I think he saw it as a threat to the future of FB
Only time can tell if it was a good decision or not.
I think it shows good awareness of his competitors though, doing nothing against the whatsapp threat imo would have been a major blunder (keeping my ears open for what the younger crowds reaction is to this).
 
Last edited:

cristian tello

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
154%
Nov 11, 2013
68
105
28
India
it is trending on fb right now(wondering whether it was actually being discused or fb is just promoting it :p )
it was bought for 19 billions(12 in stocks,4 in cash and 3 to be added on in next 4-5 years)
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.
Last edited:

Rawr

Gold Contributor
Speedway Pass
User Power
Value/Post Ratio
95%
Aug 12, 2007
1,838
1,755
south florida
U serious? Facebook bought the user base and Whatsapp is not really without revenue, it is $1/year and considering their growth of 1 million users a day you can make the calculations where it is going. Besides that, Whatsapp is very popular end expanding quickly in second and third world countries which with time, will accelerate the growth of facebook to have a global domination. Zuck doesn't suck!

P.S.: this leaves SnapChat with a finger in the butt.


bingo, but i'd change domination to penetration
 

oddball

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
58%
Mar 8, 2011
715
417
Austin, TX
I'm not one to say that the purchase is worthless, I see lots of value in the acquisition but the valuation seems ridiculous. Did they really need to spend $16b on it? would $5b have gotten the job done? Whatsapp almost sold for $1b to Google not long ago, now they settle on 16x that. Now other apps will be like "well whatsapp got $16b, we want more"
 

Jonleehacker

Gold Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
61%
Oct 31, 2007
1,845
1,124
Edmonton, Canada
Jan Koum picked a meaningful spot to sign the $19 billion deal to sell his company WhatsApp to Facebook earlier today. Koum, cofounder Brian Acton and venture capitalist Jim Goetz of Sequoia drove a few blocks from WhatsApp’s discreet headquarters in Mountain View to a disused white building across the railroad tracks, the former North County Social Services office where Koum, 37, once stood in line to collect food stamps.

Koum, who Forbes believes owns 45% of WhatsApp and thus is suddenly worth $6.8 billion

http://www.forbes.com/sites/parmyol...-whatsapp-into-facebooks-new-19-billion-baby/
 

Mike.B

Bronze Contributor
Speedway Pass
User Power
Value/Post Ratio
74%
Oct 27, 2011
335
247
Ohio
Which is why Facebook's actions can be considered slow lane - buying something with no revenue and just banking on their ability to make back what they made. Meanwhile WhatsApp turned a free app with a huge user base into $16B, very fast lane.

The contrast in this one deal is a great example of two different business mindsets.

Really cool to see, great share!

Not sure if spending roughly $40 CAC to acquire 450 million new customers is slow lane ...
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

oddball

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
58%
Mar 8, 2011
715
417
Austin, TX
Well they aren't all new, some of them use Facebook already.
 

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

Latest Posts

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Top