Saturday, February 22, 2014

Facebook Overpaid

Let me be a spoilsport here; Facebook's US$16 billion acquisition of WhatsApp is stupid!

Now Facebook has been on a buying spree ever since they went public, US$1 billion for Instagram, a failed US$3 billion offer for photo-sharing mobile app Snapchat, and now US$16 billion for WhatsApp. Now I can understand Facebook CEO Mark Zuckerberg trying to get into the mobile messaging market but is WhatsApp worth US$16 billion?

Hell no! This is a company that basically offers only 1 service and charges its users the grand price of US$1 annually to use it. Oh, and users get the first year free. Even though it has about 450 million users, logic say most of these users are using WhatsApp due to the price. The price rises and...they might not be there. So I think it's fair to say that 450 million number is kind of a mirage.

A company like that is worth US$16 billion? It's still February but to say Facebook overpaid for WhatsApp is the understatement of the year.

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