Facebook earnings: $232M loss for WhatsApp, breakdown of WhatsApp purchase, and lots of mobile users

Facebook earnings: $232M loss for WhatsApp, breakdown of WhatsApp purchase, and lots of mobile users
When it comes to Facebook and WhatsApp, it can actually be somewhat difficult to tell the story much beyond financials. The acquisition of WhatsApp only finalized earlier this month, so the two companies are still relatively independent. Now, were getting a bit more info on the money side of things, including a big loss for WhatsApp and a breakdown of why Facebook paid so much for the app. Facebook also announced that it had 456 million mobile-only daily active users, and over 1.1 billion daily active users on a mix of mobile and web.

The financial side of things aren't actually as bad as they look for WhatsApp. The $232 million net loss for the first 6 months of 2014 includes $206.5 million in share-based compensation expenses and issuance of common stock at below fair value. If you take that out of the equation, WhatsApp spent $13.5 million in net cash for operating expenses, and brought in $15.921 million in revenue. Although, it should be noted that about $16 million in revenue is surprisingly low for WhatsApp, which has close to 600 million users and supposedly charges a $1 per year subscription fee. Those numbers don't seem to add up, even for a 6 month span. 

Another interesting part of the earnings report was the breakdown of how much Facebook paid for WhatsApp. This included $2 billion for WhatsApp's user base, $448 million for the brand name, $288 million for technology, and $21 million for "other". You may notice that doesn't add up to anywhere near the final price. That's because Facebook also added in $15.3 billion for "goodwill", which is said to be the value "from future growth, from potential monetization opportunities, from strategic advantages provided in the mobile ecosystem from expansion of our mobile messaging offerings." We would also say that the "goodwill" number is reflective of how much people love the app. That's quite a lot. 


source: Facebook

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16 Comments

1. meanestgenius

Posts: 22049; Member since: May 28, 2014

I still think they paid too much for WhatsApp.

2. bizwhizzy

Posts: 51; Member since: Aug 04, 2011

Well then it's a shame Zuck didn't give you a call before making the deal

7. meanestgenius

Posts: 22049; Member since: May 28, 2014

You have a problem with my opinion? Not that I care.

8. bizwhizzy

Posts: 51; Member since: Aug 04, 2011

Nope. Just saying that your opinion doesn't matter.

10. meanestgenius

Posts: 22049; Member since: May 28, 2014

And you think yours does? Spoiler alert: It doesn't.

11. bizwhizzy

Posts: 51; Member since: Aug 04, 2011

I've stated no opinion.

12. meanestgenius

Posts: 22049; Member since: May 28, 2014

You did, when you said mines doesn't matter. That's your opinion.

14. iushnt

Posts: 3105; Member since: Feb 06, 2013

I agree to your opinion meanestgenius

5. AnTuTu

Posts: 1612; Member since: Oct 14, 2012

I didn't get why they bought WhatsApp in the first place. They should have bought Viber.

9. aba71983

Posts: 807; Member since: Jul 24, 2014

Viber is good apps but not available world wide. Some place is banned like in Middle East. Because in Middle East is very sensitive and their government decided to banned because it features for video calling. They don't like video call in viber because they cannot detect where it come from especially if the two person making PORN in the video calls. They very sensitive when it comes in Porn, Sex, Masturbation but they are EVIL inside. I was thinking also why they don't banned Tango because it has video call also.

16. Metamorphosis

Posts: 15; Member since: Oct 20, 2014

Viber is from Israel and was founded by Israelis. Thats why some countries in western asia are blocking it. and i understand why they do this. :-)

6. aba71983

Posts: 807; Member since: Jul 24, 2014

The price is right. WhatsApp is way better apps like other app thru sendeng msg, videos. But since the FB messenger seperate to FB main apps the system getting confused to other users. Many users rate FB apps in 2⭐️ only because of the poor service. Why do you need to download 2 apps of FB if you can download 1 apps before. It just a waste of memory space in our phone.

3. Miracles

Posts: 560; Member since: Aug 31, 2013

Lol...the ship is sinking already.

4. mixedfish

Posts: 1555; Member since: Nov 17, 2013

Did you even read the article?

13. rjmlive

Posts: 74; Member since: Apr 07, 2012

They should have just done what Google does with Android and hide the enormous losses in something that makes money so they don't have to explain anything to shareholders.

15. KyleRiemen

Posts: 170; Member since: Oct 29, 2014

Facebook is very fragile. The only, but significant, reason to stay with Facebook is, that everybody is on Facebook. Google offers so much more: Android, Youtube, GPlay, GSearch, Gdrive, Gmail, GMaps, Streetview, Docs, Picasa, Blogger, Hangouts, G+, etc. If they would have bought Whatsapp and integrated it to Hangouts and the Google ecosystem, that would have been the end for Facebook. Thats why they paid so much, even if the users are practically the same and it is hard to gain money with it.

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