Revenue is a part of it, but also remember that it's only a proportion of generated value. The fact that so many people use the app to communicate indicates that it's providing them with substantial value, even if the company chooses not to capture more of that value.
The numbers are staggering: 450 million users in less than three years. That's a real company. That's more users than most startups will ever see in a lifetime of use let alone daily usage.
Yea, whatsapp has a nosebleed valuation because of it's user base size and lock in effect(zuck hopes at-least, vulnerable to changes in ios and android default messenger), but i'd say its definitely real. I respect them a lot more than say groupon, because they are actually a reasonable size(just 32 engineers) for the complexity of their tech, and they provide a really useful service. Compared to say groupon which hires thousands of salespeople and provides a marginally useful service. Their success has and will continue to drive down sms price gouging, and I think that's a good thing.
That's apples to orange, you are comparing the tech employees of a tech company to the sales employees of a marketing company that needs to call its customers and prospects all over the world again and again.
I have no love for Groupon but that comparison is nonsense.
I'm just saying groupon it's a stupid company that wastes capital IMO(obviously everyone has a different idea of how capital should be put to use). If groupon actually had a good product, retailers would be calling them.
I own a metal working company and car parts stores. I jumped from software developing to metal fabrications, I can assure you that being able to administer everything from my own erp at almost no cost is the key of my success.
This is a real company by any measure. Their revenue comes from charging users for using their app. Maybe the sentiment you are really expressing is that their revenue doesn't seem, ignoring all other aspects of the company's value, to justify the price of acquisition?
It took FB 10 years to get to where it is today. Is that a process that WhatsApp wants to go through? I mean the finality usually ends in either an acquisition or an IPO; having shareholders on your mind constantly seems pretty stressful. I suppose they could've stayed private and seen what's possible.
Either way the Forbes website is visual chaos and I'm still nauseous and disoriented after reading that article.
Despide the fact that everybody got a strange feeling when reading the name "Facebook" in combination with WhatsApp:
Congrats to the team of WhatsApp to build such a successful product in five years with a team of 32 engineers (~ $500 million/engineer). Reminder: They nearly replaced the SMS service worldwide.
Let's hope that the words by Mark Zuckerberg will be the truth and WhatsApp will be kept as an independent product in the future.
Even if the company had nonengineers, it doesn't affect the ratio between revenue and engineers. The statistic usually does not imply that engineering is solely responsible for the success. Further, it generally can be hard to determine what portion of revenue is due to engineering versus marketing/sales, since the functions work together in a dependent way to make money.
Clearly this team has been quite successful! I can't agree say that they have almost replaced SMS, as many people communicate with me through SMS or iMessage. I have never used whatsapp nor has anybody a requested that I use it with them. As far as other messaging, everybody I know uses kik or Skype.
The fact about WhatsApp that blew me away is that they have 72% DAILY active users. I can't think of any other service with that kind of engagement. Even Facebook must be impressed at how often people come back to WhatsApp.
Of course, but it's amazing that a start up with such basic features has gotten to the point where you can compare it to texting or email as far as engagement.
What do you mean? IT IS TEXTING! It's texting via a TCP connection and with the help of Apple's and Google's push messaging servers instead of going through the SMS channel of a GSM network.
As a product it's the exact same as SMS/MMS. Just the technical implementation is different.
Of course they're not using Apple's push servers on J2ME devices. They're using it on iOS. Of course they're not using Google's push servers on Windows Phone devices. They're using it on Android.... How else would you get notified?
Also I never said it wasn't attractive. I just tried to explain that conceptionally as a product it's the same as text messaging and should thus have similar Daily to Monthly User ratios.
That's what I don't get. If nothing will change for the users, then why did Facebook acquire them? Why did they bother? Just so that they can run statistics and include WhatsApps numbers in there as well because they now belong to the same organisation?
Diversification. Aquire as many relevant products as you can to stay, well, relevant. If Facebook.com is losing users then it makes sense for them to use the money they have now to buy a company that's gaining users.
Then why WhatsApp over thousands of other companies they could have acquired? No, there has to be another reason and there is no way WhatsApp is not going to change because of this. Their saying it won't change is like the like a corporate VP stepping down "to spend more time with his family".
This blog post is pure bullshit. They built a new version of ICQ, luckly people joined and network effects made them big -- not their competence or the quality of the product. They shouldn't be proud of their work.
Was WhatsApp really that successful? I can't imagine it caught on with many young adults or older who have no trouble paying for SMS given the convenience. Is their demographic comprised of kids?
Looking at Whatsapp's legal info some notable info, nothing too surprising:
* "You expressly acknowledge and agree that in order to provide the Service, WhatsApp may periodically access your contact list and/or address book on your mobile device [...] You hereby give your express consent to WhatsApp to access your contact list and/or address book for mobile phone numbers in order to provide and use the Service. We do not collect names, addresses or email addresses, just mobile phone numbers."
* Section 3C concerning not hacking them and giving a list of tools you definitely can't use under the agreement.
* "If you are under 16 years of age, you are not permitted to use the WhatsApp Service."
* "If another user has your mobile phone number stored in their mobile phone address book or contact list, they will be able see your status information unless you have chosen to block such user."
* "The WhatsApp Site and Service are hosted in the United States and are intended for and directed to users in the United States. If you are a user accessing the WhatsApp Site and Service from the European Union, Asia, or any other region [...] you are transferring your personal information to the United States and you expressly consent to that transfer and consent to be governed by California law for these purposes."
* "In the event that WhatsApp is acquired by or merged with a third party entity, we reserve the right to transfer or assign the information we have collected from our users as part of such merger, acquisition, sale, or other change of control." [they go on to say that they may not be able to control use of information in cases which include "reorganization"]
Reading between the lines it seems you can hack them with fiddler (or the like) and that the legal info is saying "your info is definitely being monitored by USA governmental groups"?
What could be the purpose of this aquisition if nothing changes?
I suspect WhatsApp won't change immediately but after some time they do small changes towards a facebook integration.
19bn, 16bn of which is inflated Facebook stock. Zuckerberg knows what he is doing, he's playing the AOL tactic, better use that stock to make some acquisitions before it tanks.
I firmly believe that it is consumer apps, and consumer apps alone, that can give blazing home runs like this one.
Despite the risk, numerous deaths, blood and corpses all over the place. Somehow valley since last September had been running after enterprise junk but that's not where the gems lie (My opinion of course!). There is money in enterprise but no home run possible over there.
Edit: I like the way the edited title of this thread: Facebook (whatsapp.com).
It depends what you consider a 'home run'. I consider building a sustainable business that will generate revenue and create products for the next 10/20/30 years a home run. I would consider building an app, having no business model (admittedly Whatsapp app was generating revenue although I doubt it was much), and being lucky enough to get acquired by a company willing to pay stupid amounts of money to kill a competitor and keep you away from other competitors the furthest thing from a home run.
> It depends what you consider a 'home run'. I consider building a sustainable business that will generate revenue and create products for the next 10/20/30 years a home run.
10/20/30 years? Look those aren't the days of Henry Ford or J.D.Rockefeller.. tech is changing ever-faster at an exponential rate. You wanna create products for 30 years, none of which will live on their own much longer than 3-4 years (if lucky/successful in their market) because everything is constantly changing? I agree: flipping a messenger toy to FB is a "lottery win", but "a sustainable business that will generate revenue" for 30 years, what is that supposed to be in today's environment? That's a bit of a pipe dream too, just the "nobler" one.
> admittedly Whatsapp app was generating revenue although I doubt it was much
I imagine they made ~$100m last year (400m active users, I'm guessing 100m of which using for more than a year), which is almost guaranteed to go up. For a company with ~50 employees how is that not sustainable?
