CIO Today

CIO Today Network Sites:   Top Tech News  |   CIO Today   |   Mobile Tech Today   |   Data Storage Today
Daily Briefing for Technology's Top Decision-Makers
Vblock™ Systems:
Advanced converged infrastructure
increases productivity & lowers costs.

www.vce.com
Saturday, April 19th 
24/7/365 Network Uptime!
This ad will display for the next 20 seconds. Please click for more information, or scroll down to pass the ad, or Close Ad.
Trending Topics:   Security Heartbleed Big Data Cloud Computing Windows XP Data Centers OS X Mavericks
Home
Enterprise Software
Enterprise Hardware
Big Data
Network Security
Cloud Computing
CRM Systems
Data Storage
Operating Systems
Communications
CIO Issues
Mobile Tech
Chips & Processors
World Wide Web
Business Briefing
After Hours
Press Releases
 
Free Newsletters
Top CIO News
 
Mobile Tech Today
 

World Wide Web

Is WhatsApp Really Worth $19B to Facebook?

Is WhatsApp Really Worth $19B to Facebook?
February 20, 2014 10:06AM

Bookmark and Share
Can Facebook make money off the $19 billion it’s paying for WhatsApp? How many of its 450 million users are net new to Facebook? How can Facebook convert those users into recurring revenue? Assuming all 450 million WhatsApp users pay $1 a year, it could break even in about 40 years. By that time, Mark Zuckerberg should have outgrown his hoodies.

Neustar, Inc. (NYSE: NSR) is a trusted, neutral provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors. Neustar applies its advanced, secure technologies in location, identification, and evaluation to help its customers promote and protect their businesses. More information is available at www.neustar.biz.

As it continues its evolution in a mobile era, Facebook is making another blockbuster acquisition. The social media giant just grabbed WhatsApp for $19 billion.

WhatsApp is a fast-growing cross-platform mobile messaging company. The sale price is $16 billion, including $4 billion in cash and about $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp's founders and employees that will vest over four years after the deal closes.

"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg, Facebook founder and CEO. "I've known Jan for a long time and I'm excited to partner with him and his team to make the world more open and connected."

Driving User Engagement

Here are some numbers behind WhatsApp: More than 450 million people use the service each month. Seventy percent of those people are active on the service on any given day. WhatsApp’s messaging volume is approaching the entire global telecom SMS volume. And the company is posting continued strong growth, adding more than 1 million new registered users per day.

From the outside looking it, it appears the acquisition really does support Facebook and WhatsApp’s shared mission to bring more connectivity and utility to the world by delivering core Internet services efficiently and affordably. The companies are betting the merger will help accelerate growth and user engagement across both companies.

"WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide,” said Jan Koum, co-founder and CEO of WhatsApp.

Was It a Good Buy?

Facebook likes to think it fosters an environment where independent-minded entrepreneurs can build companies, set their own directions and focus on growth while also benefiting from the social media giant’s expertise, resources and scale. The company said this approach is working well with Instagram, and WhatsApp will operate in the same manner.

We caught up with Marcus Nelson, former head of social media at Salesforce.com and current CEO of Addvocate, a social sharing platform for people at work, to get his take on the megadeal. He told us, as the CEO of a startup, he’s thrilled to see any company get $350 million per employee.

“Even so, I’m hard pressed to understand how Facebook expects to make money off that $19 billion it’s paying for WhatsApp,” Nelson said. “We don’t know how many of its 450 million users are net new to Facebook, or how Facebook can convert those users into recurring revenue. Assuming all 450 million WhatsApp users pay $1 a year, it could break even in about 40 years. By that time, Mark Zuckerberg should have outgrown his hoodies."

Tell Us What You Think
Comment:

Name:



 World Wide Web
1. 'Like' Cheerios, Give Up Right To Sue
2. Heartbleed Could Cost Millions
3. Google Earnings, Sales Disappoint
4. Tech Giant Alibaba Plans U.S. IPO
5. Google Street View Unravels CAPTCHAs




 Most Popular Articles
1. BlackBerry Drops T-Mobile After Nasty Spat
2. Cisco, IBM Launch Internet of Things Consortium
3. Salesforce CRM Gets Industry Specific for Internet of Customers
4. IBM Applies Big Data Analytics To Fight Against Fraud
5. Intel Bets on Cloudera for Big Data Analytics

Have an informed opinion on this story?
Send a Letter to the Editor.
We want to know what you think.
Send us your Feedback.

 Related Topics  Latest News & Special Reports

  Poll: A Mix of Feelings on Future Tech
  Google, Rockstar Suit Stays in Calif.
  Michaels: Nearly 3M Cards Breached
  'Like' Cheerios, Give Up Right To Sue
  Heartbleed Could Cost Millions

 Technology Marketplace

Business Intelligence
Get real-time, cloud-based information services with Neustar.
 
Cloud Computing
BMC's I.T. solutions unleash the power of your business
Next Generation Data Center Is Here! Vblock™ Systems from VCE
 
Contact Centers
HP delivers the future of the contact center with HP Qfiniti 10.
 
Data Storage
Next Generation Data Center Is Here! Vblock™ Systems from VCE
Barium Ferrite (BaFe) is the future of tape.
2.5" Enterprise-class SATA & SAS SSDs for server & storage applications
 
Enterprise Hardware
Barium Ferrite (BaFe) is the future of tape.
2.5" Enterprise-class SATA & SAS SSDs for server & storage applications
 
Enterprise I.T.
BMC's I.T. solutions unleash the power of your business
 
Hardware
Protect your network with APC Smart-UPS battery backup
 
Network Security
Protect your network with APC Smart-UPS battery backup
 

Network Security Spotlight
Michaels Says Nearly 3M Credit, Debit Cards Breached
Arts and crafts retail giant Michaels Stores has confirmed that a data breach at its POS terminals from May 2013 to Jan. 2014 may have exposed nearly 3 million customer credit and debit cards.
 
Heartbleed Could Cost Millions, Could Have Been Prevented
Early estimates of Heartbleed’s cost to enterprises are running in the millions. The reason: revoking all the SSL certificates the bug leaked will come at a very hefty price.
 
Google's Street View Software Unravels CAPTCHAs
The latest software Google uses for its Street View cars to read street numbers in images for Google Maps works so well that it also solves CAPTCHAs, those puzzles designed to defeat bots.
 

Enterprise Hardware Spotlight
Vaio Fit 11A Battery Danger Forces Recall by Sony
Using a Sony Vaio Fit 11A laptop? It's time to send it back to Sony. In fact, Sony is encouraging people to stop using the laptop after several reports of its Panasonic battery overheating.
 
Continued Drop in Global PC Shipments Slows
Worldwide shipments of PCs fell during the first three months of the year, but the global slump in PC demand may be easing, with a considerable slowdown from last year's drops.
 
Google Glass Finds a Home in Medical Education, Practice
Google Glass may find its first markets in verticals in which hands-free access to data is a boon. Medicine is among the most prominent of those, as seen in a number of Glass experiments under way.
 

Mobile Technology Spotlight
Google Releases Chrome Remote Desktop App for Android
You're out on a sales call, and use your Android mobile device to grab a file you have back at the office on your desktop. That's a bit easier now with Google's Chrome Remote Desktop app for Android.
 
Amazon 3D Smartphone Pics Leaked
E-commerce giant Amazon is reportedly set to launch a smartphone after years of development. Photos of the phone, which may feature a unique 3D interface, were leaked by tech pub BGR.
 
Zebra Tech Buys Motorola Enterprise for $3.45B
Weeks after Lenovo bought Motorola Mobility’s assets from Google for $2.91 billion, Zebra Technologies is throwing down $3.45 billion for Motorola’s Enterprise business in an all-cash deal.
 

Navigation
CIO Today
Home/Top News | Enterprise Software | Enterprise Hardware | Big Data | Network Security | Cloud Computing | CRM Systems
Data Storage | Operating Systems | Communications | CIO Issues | Mobile Tech | Chips & Processors | World Wide Web
Business Briefing | After Hours | Press Releases
Also visit these Enterprise Technology Sites
Top Tech News | CIO Today | Mobile Tech Today | Data Storage Today

Services:
FreeNewsFeed | Free Newsletters | XML/RSS Feed

About CIO Today Network | How To Contact Us | Article Reprints | Services for PR Pros (In partnership with NewsFactor) | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 CIO Today. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.