Hacker News Reader

Comment by downandout | Hacker News Reader

I think the Whatsapp price was a huge blunder by Zuck. Whatsapp has lots of users - most of whom are in countries viewed as almost worthless by advertisers. Their US footprint is insignificant, and shows no signs of growing here or in many other valuable countries. Their current revenue - $10.2M/year with 400M users - shows their users' propensity to pay.

Even if you valued Whatsapp by Facebook's P/E ratio of 87.74, it would have to make ~$215M/year in net profit to justify the (original) $19 billion price tag. That's around $0.50/user/year in net profits. I just don't see it ever happening.

View on HN

Whatsapp has completely won in many foreign markets.

I don't have a Facebook, but network effects forced me to use whatsapp. Literally every woman I've attempted to communicate with over the past year uses whatsapp exclusively. They may be from Africa, central Europe, India, Vietnam, its all the same - whatsapp.

Personally I hate it - it's terrible compared to google hangouts and doesn't even have a web client. But if I don't use it, no women.

Maybe you want to write off the rest of the world, but zuck isn't.

> Literally every woman I've attempted to communicate with over the past year uses whatsapp exclusively. They may be from Africa, central Europe, India, Vietnam, its all the same - whatsapp.

Just for reference, in China it's wechat, and whatsapp is unknown.

Likewise in europe it's Kik and Viber.

At least in Holland and Germany I think it's also predominantly WhatsApp, though.

Out of curiosity, why are you communicating with women from Africa, central Europe, India, and Vietnam?

Wikipedia has a good explanation: http://en.wikipedia.org/wiki/Dating

More seriously, I'm a foreigner and I live in a college town so I get many opportunities to meet foreigners. Indians also tend to view me more as a source of novelty sex rather than as a real relationship [1]. US/Africa culture gaps are also a LOT smaller than US/India or Africa/India culture gaps which sometimes makes things easier.

[1] I'm not moralizing or criticizing nor am I particularly averse. One night stands are great. I'm merely at a place where companionship is as important to me as sex.

[edit: I should clarify that I'm an American, I currently live in India, and "foreigner" = "not Indian".]

> Whatsapp has lots of users - most of whom are in countries viewed as almost worthless by advertisers. Really? I have run campaigns in almost every country on this rock. All people are valuable in some way. Sure a wealthy country citizen is worth more but you'd be surprised how much companies will still pay and compete to reach that villager in Thailand on their mobile phone.

I agree that $19b was excessive for this company, but if they can maintain/grow market share then it wont be that bad. But given the way technology changes I think they should have discounted their offer to offset the risk another service gains popularity. Unless FB do something to lock in distribution like create their own mobile OS, this will remain a big risk.

It's myopic to think that anything/everything they do is advertiser driven. If you think of Facebook's goal as to "connect the world," and with such a large user base on WhatsApp, you can imagine that all WA needed to do was add a profile feature, and BAM - legitimate Facebook contender.

It's why I think FB is nervous now that Twitter's profiles look a tad like FB timelines...the boundary is now a bit blurred.

Facebook is a public company now, their goal is to generate value for their shareholders. All other goals like 'connect the world' are secondary.

Oh come on - it's not like we think Google abandoned their "do no evil" mantra or their mission to organize the world's information simply because they went public...or Apple stopped designing great products and revolting against mainstay ways we view our relationships with technology. Granted, there may be additional considerations, but I doubt any person who has worked there would say that optimizing shareholder value is #1 priority

(though I do believe the former was abandoned for other reasons, but that's a separate discussion...)

It's popular in emerging markets. Maybe it won't be worthless in 10 years. I still don't get the price. WhatsApp doesn't have the market cornered. There are 2-3 competitors and most locals I've met use all of them.

> most of whom are in countries viewed as almost worthless by advertisers

Facebook is presumably making the bet that eventually those countries will no longer be deemed worthless by advertisers.

I don't know whether to be happy or sad about that fact that my country is "worthless" according to advertisers.

Reply on news.ycombinator.com