I agree that this would be a process. As for losing revenue beyond $19bn. FB's revenue is a little under $8bn, so they have paid 2.5 years of revenue for this? I really can't construct a scenario where this makes sense.
Well, first of all. You have to take both growth opportunity and potential revenue loss into account and add them up. Second, there is also growth FB expects without Whatsapp. The 19bln most likely will be two years of revenue or even less. And when you buy a company you consider the effect of the takeover more than two years going forward.
Well, first of all. You have to take both growth opportunity and potential revenue loss into account and add them up. Second, there is also growth FB expects without Whatsapp. The 19bln most likely will be two years of revenue or even less. And when you buy a company you consider the effect of the takeover more than two years going forward.
Two years of revenue is a HUGE amount -- it is also around six/seven years of profits. We seem to agree that left to its own devices, WhatsApp's "business model" (if you can call it that, since it does not really make money) will be dead in a couple of years, because the telcos, slow though they are, will not be able to get much more milk out of the SMS/MMS cash cow, and will adapt to the American model for competitive reasons. So, FB is paying just for the WA phone book. It's worse: FB has considerable marketing muscle, which it could use to aggressively push FB messenger. I can't believe that it would cost $19BN to overtake WhatsApp -- FB could just GIVE you $10 to try their service (which is free), and this would cost less than a quarter of what it cost to by WA.
No, Android users will install iMessage for the same reasons iOS users installed WhatsApp . And note that WhatsApp is currently the only cross platform solution.
Maybe someone can explain this for me. What does Whatsapp do that Skype or Facebook Messenger don't already do ?
I see no reason why iMessage should go cross platform unless someone can explain how it is profitable for Apple. It's not like iMessage on the iPhone only works with other iOS users. I use iMessage to instant message people on non-iOS devices all the time. Also the App Store offers other instant messaging clients, like Whatsapp, so what exactly are people missing out on?
Woz has said in the past that iTunes should be on Android. Ok, does he have any stats to show that people using Android devices would download iTunes on to their device and buy things from it? Wouldn't most people that care about such things use Google Play? Or is there a large number of iTunes users that don't have an iPhone but would still use iTunes? For me that's another case of show me how this makes Apple money, because if it doesn't I don't see what the point is.
1) I disagree. All we have to look at is what making iTunes platform-agnostic did to sales of the iPod, iPhone, iPad, and Mac. (Note that you do not need any Mac hardware to run iTunes). It catapulted the company into the major leagues.
You’re not giving Apple’s hardware nearly enough credit. Once people see what Apple’s software can do, I claim that it actually makes them want – even aspire to – Apple’s hardware.
I’d even go a step further and suggest that Apple sell iLife (for a hefty fee) to non-iOS non-OSX users. I believe that the long-run outcome will be that Apple’s hardware sales will go through the roof.
2) Actually iCloud is the least interesting and useful product for me. It’s mediocre. I don’t think it’ll amount to much in other platforms. But FaceTime and iMessage are simply fabulous products.
Moreover, I see that you completely ignored the more important point, i.e., positive network externalities for communication/networking products. Would you be willing to use an email system from Apple that only received emails from and sent emails to other Apple users? If your answer is ‘no,’ I hate to say that you’ve lost your argument.
So you want Apple to spend money and resources developing software for other platforms, and then charge for that software, the same software they just made free on Mac and iOS devices? How many non-Mac/iOS users would pay for that software? And if people really wanted it wouldn't they already jump to Apple hardware since they can get it for free?
So you want Apple to spend money and resources developing software for other platforms, and then charge for that software, the same software they just made free on Mac and iOS devices? How many non-Mac/iOS users would pay for that software? And if people really wanted it wouldn't they already jump to Apple hardware since they can get it for free?
No, Android users will install iMessage for the same reasons iOS users installed WhatsApp . And note that WhatsApp is currently the only cross platform solution.
Maybe someone can explain this for me. What does Whatsapp do that Skype or Facebook Messenger don't already do ?
I am not particularly arguing with you, but the granddaddy of these sort of deals is YouTube: Google already HAD the technology (Google Video, which was in no way worse), and YouTube was not even particularly popular back then (it became so due to Google marketing), so it seemed like Google was setting a fire to $1BN. And maybe it was, but now this is viewed as a great success.
The YouTube deal actually made a lot of sense for Google at the price paid. Many people pointed that out.
Maybe someone can explain this for me. What does Whatsapp do that Skype or Facebook Messenger don't already do ?
The biggest difference is that you don't need to get a personal profile. You can join without feeling like you are part of a social network. There are no public posts. So basically, they get people to join who do not like to join a social network. That is why it is valuable to FB. There are a lot of people using whatsapp who do not use FB. And that is also the reason why messenger is less successful in Europe and will not be able to replace it. No matter how much it is advertised.
The biggest difference is that you don't need to get a personal profile. You can join without feeling like you are part of a social network. There are no public posts. So basically, they get people to join who do not like to join a social network. That is why it is valuable to FB. There are a lot of people using whatsapp who do not use FB. And that is also the reason why messenger is less successful in Europe and will not be able to replace it. No matter how much it is advertised.
Skype – couldn't they advertise this the same way?
Or make a modified version of Messenger called Anonytext or whatever the hell, and promote that to both Facebook and non-Facebook users. Whatsapp seems incredibly redundant for $19B.
The scariest part of this deal from an investor's POV is that WhatsApp is NOT a social network - the ease with which someone can sign up equates to zero stickiness – people can switch to a different app in an instant.
Basically Facebook is paying $19 billion for a very low-revenue phone book, which may or may not be permanent or grow.
The YouTube deal actually made a lot of sense for Google at the price paid. Many people pointed that out.
Yes, and many people thought it was stupid (including, for example, Mark Cuban), so it was certainly not an obviously a good or bad idea. Given that Google video did exist, and was technically no worse than YouTube, as far as I can tell (YouTube has gotten much better in the last eight years, but obviously Google has been developing it quite intensively), there is certainly a case to be made that money was already burning a hole in Google's pocket, just as it is now burning a hole in FB's pocket.
Skype – couldn't they advertise this the same way?
Or make a modified version of Messenger called Anonytext or whatever the hell, and promote that to both Facebook and non-Facebook users. Whatsapp seems incredibly redundant for $19B.
The scariest part of this deal from an investor's POV is that WhatsApp is NOT a social network - the ease with which someone can sign up equates to zero stickiness – people can switch to a different app in an instant.
Basically Facebook is paying $19 billion for a very low-revenue phone book, which may or may not be permanent or grow.
I completely agree, and note that Microsoft bought Skype not so long ago for a lot less money (and there was a widespread, if not unanimous, opinion that MSFT overpaid). Skype had (and still has) a vastly superior product to WhatsApp.
I see no reason why iMessage should go cross platform unless someone can explain how it is profitable for Apple. It's not like iMessage on the iPhone only works with other iOS users. I use iMessage to instant message people on non-iOS devices all the time. Also the App Store offers other instant messaging clients, like Whatsapp, so what exactly are people missing out on?
If iMessage were to come to Android, it would give users yet another messaging client to juggle. What would push users to use iMessage instead of existing cross-platform messaging services like gtalk/hangouts, which is already installed on most Android devices and available to anyone with a web browser and a gmail account?
1) I disagree. All we have to look at is what making iTunes platform-agnostic did to sales of the iPod, iPhone, iPad, and Mac. (Note that you do not need any Mac hardware to run iTunes). It catapulted the company into the major leagues.
You’re not giving Apple’s hardware nearly enough credit. Once people see what Apple’s software can do, I claim that it actually makes them want – even aspire to – Apple’s hardware.
I’d even go a step further and suggest that Apple sell iLife (for a hefty fee) to non-iOS non-OSX users. I believe that the long-run outcome will be that Apple’s hardware sales will go through the roof.
2) Actually iCloud is the least interesting and useful product for me. It’s mediocre. I don’t think it’ll amount to much in other platforms. But FaceTime and iMessage are simply fabulous products.
Moreover, I see that you completely ignored the more important point, i.e., positive network externalities for communication/networking products. Would you be willing to use an email system from Apple that only received emails from and sent emails to other Apple users? If your answer is ‘no,’ I hate to say that you’ve lost your argument.
iTunes IS NOT PLATFORM AGNOSTIC. It's Dual Platform (Win/OS X)
My personal favorite all-time plug for fans to ask Apple to open up the operating system to create a clone vendor list was re-soundly and honestly by Steven P. Jobs, internally and at MacWorld.
``We checked in on the clone business and you know what we discovered? Nearly all of the clone vendor sales took sales away directly from Apple. They weren't growing the user base.''
The reason the iPod was a success is it served a simple purpose: playing Music and later showing Videos and simple games, before being surpassed by the iPod Touch, etc.
iTunes was the Media software that managed your media device. That's it. It grew a media centric, and mainly one-trick pony, product into a big business because what OS within it was not part of the equation.
Extending Apple to open up key applications and/or OS X to other platforms and/or vendors is RETARDED.
What value would there be for Apple in an Android version of iMessage? This is a great feature exclusive to Apple hardware, it would be nothing but a drain on Apple's resources. At least with iTunes on Windows people occasionally buy things.
Comments
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You're using this phrase wrong.
Maybe in his country they call spaghetti 'money'
Well, first of all. You have to take both growth opportunity and potential revenue loss into account and add them up. Second, there is also growth FB expects without Whatsapp. The 19bln most likely will be two years of revenue or even less. And when you buy a company you consider the effect of the takeover more than two years going forward.
Two years of revenue is a HUGE amount -- it is also around six/seven years of profits. We seem to agree that left to its own devices, WhatsApp's "business model" (if you can call it that, since it does not really make money) will be dead in a couple of years, because the telcos, slow though they are, will not be able to get much more milk out of the SMS/MMS cash cow, and will adapt to the American model for competitive reasons. So, FB is paying just for the WA phone book. It's worse: FB has considerable marketing muscle, which it could use to aggressively push FB messenger. I can't believe that it would cost $19BN to overtake WhatsApp -- FB could just GIVE you $10 to try their service (which is free), and this would cost less than a quarter of what it cost to by WA.
Sorry, it does not compute.
Maybe someone can explain this for me. What does Whatsapp do that Skype or Facebook Messenger don't already do ?
Woz has said in the past that iTunes should be on Android. Ok, does he have any stats to show that people using Android devices would download iTunes on to their device and buy things from it? Wouldn't most people that care about such things use Google Play? Or is there a large number of iTunes users that don't have an iPhone but would still use iTunes? For me that's another case of show me how this makes Apple money, because if it doesn't I don't see what the point is.
Price it right, and you got it. Bingo!
As far as I can tell, nothing.
The YouTube deal actually made a lot of sense for Google at the price paid. Many people pointed that out.
The biggest difference is that you don't need to get a personal profile. You can join without feeling like you are part of a social network. There are no public posts. So basically, they get people to join who do not like to join a social network. That is why it is valuable to FB. There are a lot of people using whatsapp who do not use FB. And that is also the reason why messenger is less successful in Europe and will not be able to replace it. No matter how much it is advertised.
Skype – couldn't they advertise this the same way?
Or make a modified version of Messenger called Anonytext or whatever the hell, and promote that to both Facebook and non-Facebook users. Whatsapp seems incredibly redundant for $19B.
The scariest part of this deal from an investor's POV is that WhatsApp is NOT a social network - the ease with which someone can sign up equates to zero stickiness – people can switch to a different app in an instant.
Basically Facebook is paying $19 billion for a very low-revenue phone book, which may or may not be permanent or grow.
The YouTube deal actually made a lot of sense for Google at the price paid. Many people pointed that out.
Yes, and many people thought it was stupid (including, for example, Mark Cuban), so it was certainly not an obviously a good or bad idea. Given that Google video did exist, and was technically no worse than YouTube, as far as I can tell (YouTube has gotten much better in the last eight years, but obviously Google has been developing it quite intensively), there is certainly a case to be made that money was already burning a hole in Google's pocket, just as it is now burning a hole in FB's pocket.
Skype – couldn't they advertise this the same way?
Or make a modified version of Messenger called Anonytext or whatever the hell, and promote that to both Facebook and non-Facebook users. Whatsapp seems incredibly redundant for $19B.
The scariest part of this deal from an investor's POV is that WhatsApp is NOT a social network - the ease with which someone can sign up equates to zero stickiness – people can switch to a different app in an instant.
Basically Facebook is paying $19 billion for a very low-revenue phone book, which may or may not be permanent or grow.
I completely agree, and note that Microsoft bought Skype not so long ago for a lot less money (and there was a widespread, if not unanimous, opinion that MSFT overpaid). Skype had (and still has) a vastly superior product to WhatsApp.
I see no reason why iMessage should go cross platform unless someone can explain how it is profitable for Apple. It's not like iMessage on the iPhone only works with other iOS users. I use iMessage to instant message people on non-iOS devices all the time. Also the App Store offers other instant messaging clients, like Whatsapp, so what exactly are people missing out on?
1) I disagree. All we have to look at is what making iTunes platform-agnostic did to sales of the iPod, iPhone, iPad, and Mac. (Note that you do not need any Mac hardware to run iTunes). It catapulted the company into the major leagues.
You’re not giving Apple’s hardware nearly enough credit. Once people see what Apple’s software can do, I claim that it actually makes them want – even aspire to – Apple’s hardware.
I’d even go a step further and suggest that Apple sell iLife (for a hefty fee) to non-iOS non-OSX users. I believe that the long-run outcome will be that Apple’s hardware sales will go through the roof.
2) Actually iCloud is the least interesting and useful product for me. It’s mediocre. I don’t think it’ll amount to much in other platforms. But FaceTime and iMessage are simply fabulous products.
Moreover, I see that you completely ignored the more important point, i.e., positive network externalities for communication/networking products. Would you be willing to use an email system from Apple that only received emails from and sent emails to other Apple users? If your answer is ‘no,’ I hate to say that you’ve lost your argument.
iTunes IS NOT PLATFORM AGNOSTIC. It's Dual Platform (Win/OS X)
My personal favorite all-time plug for fans to ask Apple to open up the operating system to create a clone vendor list was re-soundly and honestly by Steven P. Jobs, internally and at MacWorld.
``We checked in on the clone business and you know what we discovered? Nearly all of the clone vendor sales took sales away directly from Apple. They weren't growing the user base.''
The reason the iPod was a success is it served a simple purpose: playing Music and later showing Videos and simple games, before being surpassed by the iPod Touch, etc.
iTunes was the Media software that managed your media device. That's it. It grew a media centric, and mainly one-trick pony, product into a big business because what OS within it was not part of the equation.
Extending Apple to open up key applications and/or OS X to other platforms and/or vendors is RETARDED.
What value would there be for Apple in an Android version of iMessage? This is a great feature exclusive to Apple hardware, it would be nothing but a drain on Apple's resources. At least with iTunes on Windows people occasionally buy things.
Also, one has to wonder if WhatsApp is violating any patents that Apple or some other company may own: http://www.thefullsignal.com/apple/ios-7/14056/apple-ios-7-imessage-patent-suggests-shake
Great question, especially when iMessage for my iPad running iOS 5.1.1 has been broken for the past 5 months.
Ok. Whatever's exactly right, as long as you get the drift.... ;-)
iTunes IS NOT PLATFORM AGNOSTIC. It's Dual Platform (Win/OS X)
+ iOS.
Tri-platform, if you like.