Was Facebook crazy to buy Whatsapp for $19.5 billion?

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?

Was Facebook crazy to buy Whatsapp for $19.5 billion?

Yes
75.06%
No
24.94%

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40 Comments

1. AfterShock

Posts: 4147; Member since: Nov 02, 2012

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

29. aksa123

Posts: 368; Member since: Jan 30, 2014

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

32. B3BLW29

Posts: 238; Member since: Mar 02, 2012

faceboobs lol

33. fireblade

Posts: 717; Member since: Dec 27, 2013

hahahaha

2. Nikolas.Oliver

Posts: 1574; Member since: Jul 01, 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?

15. dratomic

Posts: 483; Member since: Oct 09, 2013

4 nokias :))

16. gustavoace

Posts: 187; Member since: Nov 13, 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)

24. PhenomFaz

Posts: 1236; Member since: Sep 26, 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

27. imran86

Posts: 208; Member since: Sep 14, 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.

38. networkdood

Posts: 6330; Member since: Mar 31, 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.....

31. aksa123

Posts: 368; Member since: Jan 30, 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 !!!

34. kanagadeepan

Posts: 1278; Member since: Jan 24, 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...

3. kurdt

Posts: 4; Member since: Jan 06, 2014

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

23. Nabil2511

Posts: 152; Member since: Jan 27, 2014

yup.. they use wechat instead

4. Väliaikainen unregistered

Totally NUTS

30. aksa123

Posts: 368; Member since: Jan 30, 2014

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

5. FaiTheZal

Posts: 2; Member since: Feb 13, 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.

6. bachir8k

Posts: 153; Member since: Feb 25, 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...

7. akki20892

Posts: 3902; Member since: Feb 04, 2013

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

8. InspectorGadget80 unregistered

I hopeFB goes bankrupt. Plus who cares.

9. khairy-j

Posts: 2; Member since: Mar 05, 2013

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

10. rawbow

Posts: 428; Member since: Mar 30, 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

11. itsdeepak4u2000

Posts: 3718; Member since: Nov 03, 2012

They could have downloaded it. :P And Nokia's Mobile division for just 7 billion.

12. livyatan

Posts: 867; Member since: Jun 19, 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

26. snowgator

Posts: 3621; Member since: Jan 19, 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.

13. taz89

Posts: 2014; Member since: May 03, 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

14. good2great

Posts: 1042; Member since: Feb 22, 2012

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

35. kanagadeepan

Posts: 1278; Member since: Jan 24, 2012

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

17. nexusdude

Posts: 151; Member since: Aug 22, 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.

18. EclipseGSX

Posts: 1777; Member since: Oct 18, 2011

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

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