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Was Facebook crazy to buy Whatsapp for $19.5 billion?

Posted: , by Victor H.

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Was Facebook crazy to buy Whatsapp for $19.5 billion?
The biggest news today is that Facebook has signed a deal to acquire instant messaging app Whatsapp for $16 billion and with additional stock options the total price climbs to around $19.5 billion. No, we did not mistake the number, and yes, it's indeed billion - 19.5 with nine zeros after it. 

Does the deal make sense? On one hand, it's logical - Whatsapp is one of the largest IM apps in the world that has over 400 million active users right now. Whatsapp is large in China, Europe, Russia, Canada, Brazil, Australia and many other places. Actually, it’s often used as a direct competitor to Facebook Messenger. 

On the other hand, though, financially, we are still shocked at that $19.5 billion sum. As large as Whatsapp is, it remains a company with total revenues rumored to be around just $100 million with profit at the paltry $20 million in 2013. Putting this in context, let’s just mention that, nearly a year ago, rumors floated around that Google wants to buy Whatsapp for $1 billion, and that seemed like a reasonable price at the time.

All in all, though, for Facebook this might make sense, as the social network continues its aggressive expansion. At $19.5 billion, Facebook has paid a tenth of its own market cap to buy Whatsapp, but the ends sometimes justify the means. Is this true for this deal, or was Facebook just crazy to spend so much on a simple messaging app? What do you think?

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Was Facebook crazy to buy Whatsapp for $19.5 billion?
75.06%
1875 votes
(1875 votes) Yes
24.94%
623 votes
(623 votes) No

2498 votes


40 Comments
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posted on 20 Feb 2014, 07:48 14

1. AfterShock (Posts: 2025; Member since: 02 Nov 2012)


Idk, but that made sure, I'll never use it again.

posted on 20 Feb 2014, 19:16 1

29. aksa123 (Posts: 161; Member since: 30 Jan 2014)


Why not ? Perhaps faceboobs will make whatsapp free for eternity !!!

posted on 20 Feb 2014, 23:32

32. B3BLW29 (Posts: 237; Member since: 02 Mar 2012)


faceboobs lol

posted on 21 Feb 2014, 02:05

33. fireblade (Posts: 626; Member since: 27 Dec 2013)


hahahaha

posted on 20 Feb 2014, 07:52 2

2. Nikolas.Oliver (banned) (Posts: 1574; Member since: 01 Jul 2012)


Facebook is definitely out of their mind, 19 billion is way to much. How many iphones, galaxies nexuses Xperias can you buy with that amount of money?

posted on 20 Feb 2014, 10:10 7

15. dratomic (Posts: 424; Member since: 09 Oct 2013)


4 nokias :))

posted on 20 Feb 2014, 10:52 1

16. gustavoace (Posts: 82; Member since: 13 Nov 2012)


I downloaded mine for free... with 1 year of service... LOL

I think this will be just like waze. Facebook owns whatsapp, but the service will remain the same (I hope)

posted on 20 Feb 2014, 14:23 1

24. PhenomFaz (Posts: 1064; Member since: 26 Sep 2012)


forget phones,,,umm try asking how many phone manufacturing units can i open or maybe even can I start my oen telecom company? :)

But hey if Mark has thee money and it is his money, so who am I to judge? If he wants to spend it on whatsapp or whats-his-face...let him

posted on 20 Feb 2014, 15:13

27. imran86 (Posts: 30; Member since: 14 Sep 2012)


He is an Illuminati and is dictated by them what to do, that's why facebook has a 173 billion USD market value right now.

posted on 21 Feb 2014, 11:09

38. networkdood (Posts: 6244; Member since: 31 Mar 2010)


Not sure about Illuminati, but you may have something there as people are being zombified by social media...at the very worst, Facebook is just data mining software for the our gov't, and the brilliant thing about this is that people are willing participants - a govervnment's dream come true is to have its citizens willingly give up some of, or all of, their rights - see PATRIOT ACT.....

posted on 20 Feb 2014, 19:52 2

31. aksa123 (Posts: 161; Member since: 30 Jan 2014)


FB : happy valentine WA !!
WA : happy valentine too FB !!
(share chocholates)
FB : you know, I've loved you for a long time, I was so glad that you turned down Google. So, will you go out with me?
WA : wh-wha... how much do you love me, FB?
FB : as much as $19 billion in total.
WA : let's get married !
FB : ou yeah :)

Go home Mark, you are DRUNK !!!

posted on 21 Feb 2014, 07:01 1

34. kanagadeepan (Posts: 631; Member since: 24 Jan 2012)


That boy Mark is looking like a crazy kid with Dad's Credit Card buying out everything in store without knowing value for money...

posted on 20 Feb 2014, 07:55 3

3. kurdt (Posts: 4; Member since: 06 Jan 2014)


i dont think whats app has a lot of users in china

posted on 20 Feb 2014, 14:04 3

23. Nabil2511 (Posts: 147; Member since: 27 Jan 2014)


yup.. they use wechat instead

posted on 20 Feb 2014, 07:57 2

4. Väliaikainen (unregistered)


Totally NUTS

posted on 20 Feb 2014, 19:18 2

30. aksa123 (Posts: 161; Member since: 30 Jan 2014)


Nope, Mark Suckerbeard is WAY beyond nuts, he's peanut butter.

posted on 20 Feb 2014, 07:57 2

5. FaiTheZal (Posts: 2; Member since: 13 Feb 2014)


It's an overkill, if u ask me. But, for whatever WhatsApp is worth, i will still use it as long as the simplicity of this app is maintained.. no pop-up ads, stickers, etc. - as this simplicity is main distinguishable criterion to other messaging services & this is the one thing that got me hooked-up wit WhatsApp.

posted on 20 Feb 2014, 07:58 2

6. bachir8k (Posts: 78; Member since: 25 Feb 2013)


yes it's the only decent IM, fast, simple and reliable but 19.5 B is totally insane, if they invest only 1 billion in the R&D for IM, they will succeed in taking the leadership from whatsapp especially where they are already in the second place...

posted on 20 Feb 2014, 07:58 10

7. akki20892 (Posts: 3228; Member since: 04 Feb 2013)


Mark: who erase the dot, we had a deal 1.6b

posted on 20 Feb 2014, 08:04 8

8. InspectorGadget80 (Posts: 6107; Member since: 26 Mar 2011)


I hopeFB goes bankrupt. Plus who cares.

posted on 20 Feb 2014, 08:10 2

9. khairy-j (Posts: 2; Member since: 05 Mar 2013)


16bill for whatsapp..is more pricey compare to motorola n nokia when they sell it off

posted on 20 Feb 2014, 08:12 2

10. rawbow (Posts: 406; Member since: 30 Mar 2012)


If you ask me it's available for free download in all app stores and even if FB did not want to pay the price after a years' free usage, they could've downloaded a cracked apk!! Why pay 19 bil!? :P

posted on 20 Feb 2014, 08:16 4

11. itsdeepak4u2000 (Posts: 2288; Member since: 03 Nov 2012)


They could have downloaded it. :P

And Nokia's Mobile division for just 7 billion.

posted on 20 Feb 2014, 08:20 10

12. livyatan (Posts: 642; Member since: 19 Jun 2013)


19 FREAKING BILLION for a generic messaging service that has about 20 just as good or better alternatives? ?

We need another definition of crazy

posted on 20 Feb 2014, 14:56 4

26. snowgator (Posts: 3187; Member since: 19 Jan 2011)


Okay... We can close the thread and the poll after that comment. Made me laugh HARD.

Well said, livyatan. No more to say here.

posted on 20 Feb 2014, 08:39 3

13. taz89 (Posts: 2004; Member since: 03 May 2011)


Yes that's just absolutely crazy money. Just imagine what's possible with that kind of money. Also hopefully this news should help me push my friends and family onto hangouts if Facebook start changing stuff

posted on 20 Feb 2014, 09:26

14. good2great (Posts: 1039; Member since: 22 Feb 2012)


are there any non fanboy phone obsessed people in here with an ounce of business sense?

posted on 21 Feb 2014, 07:14

35. kanagadeepan (Posts: 631; Member since: 24 Jan 2012)


I know one boy with NO business sense and lot of money to WASTE. His name is Mark Zukerberg...

posted on 20 Feb 2014, 10:54

17. nexusdude (Posts: 139; Member since: 22 Aug 2013)


Great idea. WhatsApp is making crazy money and threatens Facebook Messenger. On the other hand, I never used it (WhatsApp) so I don't care.

posted on 20 Feb 2014, 11:20

18. EclipseGSX (Posts: 1546; Member since: 18 Oct 2011)


Can't beat em, buy em. Looks like Apple's motto

posted on 20 Feb 2014, 11:44

19. PBXtech (Posts: 966; Member since: 21 Oct 2013)


http://www.pbs.org/wgbh/pages/frontline/generation-like/

Frontline did a great article on Facebook and how marketers are using kids to promote their products via Facebook and other online sites. After you watch that show, you'll see this made sense.

posted on 20 Feb 2014, 12:24 1

20. aldridhl (Posts: 45; Member since: 12 Feb 2011)


If FB paid this much for a messaging app, then MS should've paid a little more for Nokia...

posted on 20 Feb 2014, 12:27

21. Jason78 (Posts: 41; Member since: 10 Apr 2013)


Facebook is planning for the life after Facebook. I makes sense to invest in companies that are up and coming before your business is on the downward trend and you can't buy companies with stock. (Only $4 Billon of the purchase was in cash, they rest is in Facebook stock.)

posted on 20 Feb 2014, 13:50 2

22. Haridenberg (Posts: 27; Member since: 03 Sep 2013)


12 zeros?! Is it British billions?! LOL

posted on 20 Feb 2014, 15:42 1

28. Run.n.Gun (Posts: 19; Member since: 06 Nov 2013)


haha apparently they paid in the trillions

posted on 20 Feb 2014, 14:43 2

25. srk_srinivas (Posts: 21; Member since: 27 Dec 2010)


at the end of the day facebook will get an office building just for 19 billion...

posted on 21 Feb 2014, 07:17

36. kanagadeepan (Posts: 631; Member since: 24 Jan 2012)


Just guess what would Mark pay if he was the one who is purchasing Nokia or Motorola? 7 Trillion$ for Nokia without patents and 13 Trillion$ for Motorola without patents...

posted on 21 Feb 2014, 07:29

37. napsterO6 (Posts: 17; Member since: 25 Jun 2012)


I would say its a good purchase

The main point of Facebook is Connection
They want the whole world to be connected......
Whatsapp would help them to connect more

posted on 24 Feb 2014, 20:13

40. TBomb (Posts: 86; Member since: 28 Dec 2012)


I feel like whatever whatsapp has to offer, facebook can do in thier chat? If they combine them, i see nothing gained

posted on 21 Feb 2014, 11:10 1

39. networkdood (Posts: 6244; Member since: 31 Mar 2010)


And, here I thought people overpaying for an ok phone in the iPhone were crazy....wowsers...

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