So Facebook have just paid $19 Billion for What$App. Clearly it’s more than an inventive company name, that tickled the fancy of The Facebook Board. So where does the value lie?
Founded in 2009 by some Yahoo’s, Wazzzzap was designed as a platform to turbo charge the lackluster world of the frumpy SMS. It’s a chat and text outlet, allowing content to seamlessly ship back and forth, in all the standard formats dear to our hearts. Video, Text, Images… the usual.
So it’s other key pluses are that it hasn’t sold out to a smorgasbord of advertising companies, which is incredibly appealing to a user not wishing to see Viagra banner adds splashing all over the screen. It’s cheap and its global and it creates a pleasurable user journey. BlackBerry Messenger with far more whistles and bells if only RIM had kept on developing that…
Facebook now need to push Android and iOS users to downloading the App. But WhatsApp have done pretty well so far in its user acquisition drive… Stunningly the downloads are around 25 million a month, equating to a staggering 430 million globally! But best of all WhatsApp hasn’t really smashed in the US yet, and it’s a bit of an untapped playground… and where is Facebook based? Oh yes… The US.
The next phase looks pretty clear, and with the other recent purchases by Facebook, they continue to grow by Strategic Acquisition, bolting on the Social Media channels with gigantic greed and gusto. BUT, can WhatsApp really be worth $19 Billion (with just 55 staff!!!), even with a cracking product and 430 million users on board? Surely Facebook could replicate the technology, pinch some clever IT super geeks from St Petersburg or The Pentagon or from err… Facebook, and go on an eyewatering sales and marketing offensive and thereby get to the same place within a year and without the same spend levels. But in Mobileland, if you snooze, you lose… Nokia and RIM, My Space and so on and so on, and so gone.
Are the Facebook Board really really impatient or, are they just extraordinarily shrewd? Time will tell. But just in case the board are reading this, and somehow didn’t know or appreciate the value of $19 Billion, they could have bought…
- 89,285 Aston Martin DB9’s or
- 2.6 Billion Pret-A-Manger Sandwich meals (including drinks and crisps, naturally) or
- 237.5 million game tickets for Arsenal…(Or equivalent club of desire)
But seriously, why would Facebook waste money on buying 89,285 Aston Martin’s, that would be silly, opulent and foolhardy… Especially when they could have bought the entire company for $5 billion.
And realistically they wouldn’t have bought so many sandwiches, they would go stale. But particularly true when you can just buy The Company for $4 billion.
And as for Arsenal… well, there are only so many games per season… so the best thing is to just buy the club for $1billion….
And they would still have $9 billion in the bank…Maybe $19 billion just isnt what it used to be.
So, What$App, underlines one stark fact, that any brand and company, can pop up and be worth substantially more than companies that have been around for years, slowly building up their value, arduously recruiting, painstakingly growing their client base, their product name and their reputation as they crawl from one shareholders meeting and investment round to the next.
Thanks to the Internet, we can all go global in a matter of minutes and time, size and number of staff are officially irrelevant, in a world where, Up-start and Start-Up are really one and the same. All you need to do is have a winning product, a good team, clarity of vision and a taste for world wide expansion.