Anyone using WhatsApp was, by definition, not using messaging options from Facebook (or Google). I'm not sure how this creates "new" Facebook users. Many WhatsApp users will likely move to <whatever new messaging app is popular> by the time Facebook integrates this into their "experience".
And speaking of experience, there is no way that Facebook (or for that matter, Google) could monetize a deal like this without bring ad revenues into the mix. So either the ad-free app now gets ads in the bargain, affecting the four-and-a-half star experience, or every text gets read, stored, and indexed to provide targeted ads. Which was the reason WhatsApps was popular in the first place.
As far as the "millions of dollars for the right to be notified if and when it entered into acquisition talks with other companies"... Creepy Google is creepy.
My thinking was that FB was going to use WA to facilitate messaging between FB and non-FB users with the hope of enticing the nons to join FB.
I can't see the value of WhatsApp's customer base. They only have 450 million active customers that can afford to cough up 99 cents per year. This group of users find texting each other about the minutia of their empty lives to be the apex of "cool." How fast will this short attention span customer base stick around once something else shiny comes along?
A single app generating a possible $450US million a year is nothing to scoff at. The problem I foresee, is that these people are on this app more than likely because they DON'T like Facebook. That 1 billion user base projection just fell off a cliff.
I can think of 3 benefits of acquiring this app along with its users...
1. Facebook can integrate its home grown chat with WhatsApp.
2. Facebook can drop the $1/yr fee and just start shoving ads in users' faces.
3. Facebook has access to a crap load of data being passed back and forth; data mining, trend tracking, etc.
450 milliion active users, with projections taking it to one billion active users. That's not buying for the sake of buying. Even someone as big as Google would rather pay cash (which it has a ton of) to acquire those users versus growing that user base organically...even though they may have the engineering and financial resources to do so.
We'll never know, but lately with Google they buy something for the sake of buying it and do absolutely nothing with it to the point where the technology is now worthless. I would want to see a strategy for buying a company and not just buy them for the sake of buying them which it seems as if Google has been doing lately.
$10 billion is so unlike Googs. I would have figured they would bid $12.3456 billion or a Fibonacci sequence. Or just blow $15 billion.
Not mentioned in the article is that the rumor of Google bidding $10B comes from two unidentified people who may or may not have any first-hand knowledge. Those un-named people might even be analysts.
Not mentioned in the article is that the rumor of Google bidding $10B people comes from two unidentified people who may or may not have any first-hand knowledge. Those un-named people might even be analysts.
Part of the issue is google did not want to put up any of their shares, one thing goggle has been careful about is not diluting the companies stock by issuing new share and especially they are not big on giving out RCU to employee. If you look at what FB did with $4B in RCU they will either buy 60M+ shares off the market to give to employees or they will have to dilute their stock by 60M+ shares by issuing new shares, however, they have 2.5B outstanding share so they pretty dilute as is so 60M is only 2% more stock to the market place.
Another example of irrational behavior by Wall street, they should have pounded FB on this, they tell apple to buy back more share so they are less diluted and drive value up, and FD is diluting themselves and Wall Street stand by and will pump the stock up.
A single app generating a possible $450US million a year is nothing to scoff at. The problem I foresee, is that these people are on this app more than likely because they DON'T like Facebook. That 1 billion user base projection just fell off a cliff.
I can think of 3 benefits of acquiring this app along with its users...
1. Facebook can integrate its home grown chat with WhatsApp.
2. Facebook can drop the $1/yr fee and just start shoving ads in users' faces.
3. Facebook has access to a crap load of data being passed back and forth; data mining, trend tracking, etc.
It just seems to me that Google is buying companies just for the sake of buying them. There's no rational at all for Google buying some of the companies they do other than buy them before someone else does. If I were a shareholder, I'd be upset at this. Its fine to buy a company if you have an intent on using it for an actual purpose to either release a new product, or make an existing one better, but buying one just for the sake of buying it before someone else does is just plain silly to me.
Or one may take Facebook at its word. They may leave it as a standalone app and simply reap the profits that otherwise FB was not harvesting. There is no need for Facebook to bring WhatsApp in house and use it to serve ads-especially if the user base is frugal and would abandon the app once rolled into Facebook. FB can be content to grow the WhatsApp user base as it had been growing and maybe up the yearly charge $1.99 per year, generating $1.99B a year when the user base grows to one billion.
Also, since the engineering is lean with this single-purpose app, the profit margin would be immense.
We'll never know, but lately with Google they buy something for the sake of buying it and do absolutely nothing with it to the point where the technology is now worthless. I would want to see a strategy for buying a company and not just buy them for the sake of buying them which it seems as if Google has been doing lately.
Google's strategy with recent acquisitions seems somewhat clear to me (with the exception of the WhatsApp bid) when looked from the perspective of AI and robotics. They missed the boat on hardware/software integration in CE to Apple and are looking to the future of robots (in which Apple seems to have limited interest). Specifically, they have been acquiring top talent and companies in artificial intelligence, computer vision, deep machine learning, and manufactured robotics.
Google wants to own robotics, artificial intelligence, and deep machine learning. My sense is that they understand that they need to get into hardware and diversify beyond ads as their primary revenue stream. What remains to be seen is if they have the chops to ship actual hardware products (robots, home automation equipment, cars, and drones) that are increasingly intelligent and autonomous. If they can, they will be in pole position for 2020 and beyond.
They hired Ray Kurzweil!
The above helps explain the Boston Dynamics, Nest, Meka Robotics, Redwood Robotics, Industrial Perception, Holomni, Bot & Dolly, and Schaft, Inc. purchases, to name a few. These represent somewhat "pure" robot plays, so to speak, although I imagine each of those robotics/AI systems use some combination of proprietary and licensed software/firmware technologies.
Add the very impressive recent AI acquisition, DeepMind technologies. There's Deep Neural Networks, and Viewdle. There is evidence that Google is interested in both industrial and consumer applications and products. Last, but not least, the self-driving car experiments fit neatly into this plan.
Having said all that, I understand one of your points is that none of these acquisitions mean Google actually will ship a product, perhaps especially because Andy Rubin is at the helm of their robotics efforts.
I need to say that I literally cannot stand Google and I am not applauding them or jumping on the Google bandwagon. They have, however been bringing together companies that have a lot in common and speak to a somewhat clear strategy going forward.
Thank you, Facebook for stopping Google from sucking everything into its "membership requirement" maw and gathering even more personal info on us.
One the smartest comment on this subject.
Well said, my friend.
P.S. As for me, as I said in another similar article, I prefer sharing my personal data to FB than freaking googlers .... In another word, any company but google can own my data and do what they wish IF that would help to bring down google.
P.S.S. Larry and The L Team ... you guys cannot win this. Apple, Facebook, Microsoft, Yahoo ... they all are after one goal and one goal only .... take a wild guess what!
I can't see the value of WhatsApp's customer base. They only have 450 million active customers that can afford to cough up 99 cents per year. Apple is quietly amused by all this hubris over a messaging app.
They found 450M people willing to pay money instead of using free equivalents from Google, Apple and Facebook.
Perhaps $1/year isn't that much to you but for such a tiny company $450M/year is great revenue.
However I would guess a large part of the appeal was it wasn't owned by FB or Google who are in the business of selling eyeballs and that unlike iMessage was cross platform.
This whole messaging thing reminds me of the 90's when every company had their of IM client but now of them talk to each other so if you had lots of friend and were unsuccessful at convincing them all to use the same IM you have to have multiply IM clients running. Then someone will create a client which will bring them all together for you.
With the plethora of mobile messaging platforms, why don't more people use multiprotocol clients like imo.im instead of juggling multiple messaging apps?
P.S. As for me, as I said in another similar article, I prefer sharing my personal data to FB than freaking googlers .... In another word, any company but google can own my data and do what they wish IF that would help to bring down google.
P.S.S. Larry and The L Team ... you guys cannot win this. Apple, Facebook, Microsoft, Yahoo ... they all are after one goal and one goal only .... take a wild guess what!
Not mentioned in the article is that the rumor of Google bidding $10B comes from two unidentified people who may or may not have any first-hand knowledge. Those un-named people might even be analysts.
Yup. You apparently hadn't noticed before that I generally avoid treating Apple rumors as fact if I even bother to comment on them at all.
So what did Google say about reports they were bidding on WhatsApp? According to Google SVP Sundar Pichai: “Whatsapp was definitely an exciting product,” he said. “We never made an offer to acquire them. Press reports to the contrary are simply untrue.”
Comments
Anyone using WhatsApp was, by definition, not using messaging options from Facebook (or Google). I'm not sure how this creates "new" Facebook users. Many WhatsApp users will likely move to <whatever new messaging app is popular> by the time Facebook integrates this into their "experience".
And speaking of experience, there is no way that Facebook (or for that matter, Google) could monetize a deal like this without bring ad revenues into the mix. So either the ad-free app now gets ads in the bargain, affecting the four-and-a-half star experience, or every text gets read, stored, and indexed to provide targeted ads. Which was the reason WhatsApps was popular in the first place.
As far as the "millions of dollars for the right to be notified if and when it entered into acquisition talks with other companies"... Creepy Google is creepy.
My thinking was that FB was going to use WA to facilitate messaging between FB and non-FB users with the hope of enticing the nons to join FB.
I can't see the value of WhatsApp's customer base. They only have 450 million active customers that can afford to cough up 99 cents per year. This group of users find texting each other about the minutia of their empty lives to be the apex of "cool." How fast will this short attention span customer base stick around once something else shiny comes along?
A single app generating a possible $450US million a year is nothing to scoff at. The problem I foresee, is that these people are on this app more than likely because they DON'T like Facebook. That 1 billion user base projection just fell off a cliff.
I can think of 3 benefits of acquiring this app along with its users...
1. Facebook can integrate its home grown chat with WhatsApp.
2. Facebook can drop the $1/yr fee and just start shoving ads in users' faces.
3. Facebook has access to a crap load of data being passed back and forth; data mining, trend tracking, etc.
Still $19 billion seems like way too much money.
450 milliion active users, with projections taking it to one billion active users. That's not buying for the sake of buying. Even someone as big as Google would rather pay cash (which it has a ton of) to acquire those users versus growing that user base organically...even though they may have the engineering and financial resources to do so.
We'll never know, but lately with Google they buy something for the sake of buying it and do absolutely nothing with it to the point where the technology is now worthless. I would want to see a strategy for buying a company and not just buy them for the sake of buying them which it seems as if Google has been doing lately.
Not mentioned in the article is that the rumor of Google bidding $10B comes from two unidentified people who may or may not have any first-hand knowledge. Those un-named people might even be analysts.
Do you apply equal skepticism to Apple rumors?
Yup. You apparently hadn't noticed before that I generally avoid treating Apple rumors as fact if I even bother to comment on them at all.
Part of the issue is google did not want to put up any of their shares, one thing goggle has been careful about is not diluting the companies stock by issuing new share and especially they are not big on giving out RCU to employee. If you look at what FB did with $4B in RCU they will either buy 60M+ shares off the market to give to employees or they will have to dilute their stock by 60M+ shares by issuing new shares, however, they have 2.5B outstanding share so they pretty dilute as is so 60M is only 2% more stock to the market place.
Another example of irrational behavior by Wall street, they should have pounded FB on this, they tell apple to buy back more share so they are less diluted and drive value up, and FD is diluting themselves and Wall Street stand by and will pump the stock up.
They didn't buy the app really. It was the customer base they wanted.
They didn't buy the app really. It was the customer base they wanted.
I do not disagree, but why pay for what you already have, i would suspect that a large portion of the whatapp user also have FB account.
Or one may take Facebook at its word. They may leave it as a standalone app and simply reap the profits that otherwise FB was not harvesting. There is no need for Facebook to bring WhatsApp in house and use it to serve ads-especially if the user base is frugal and would abandon the app once rolled into Facebook. FB can be content to grow the WhatsApp user base as it had been growing and maybe up the yearly charge $1.99 per year, generating $1.99B a year when the user base grows to one billion.
Also, since the engineering is lean with this single-purpose app, the profit margin would be immense.
Google's strategy with recent acquisitions seems somewhat clear to me (with the exception of the WhatsApp bid) when looked from the perspective of AI and robotics. They missed the boat on hardware/software integration in CE to Apple and are looking to the future of robots (in which Apple seems to have limited interest). Specifically, they have been acquiring top talent and companies in artificial intelligence, computer vision, deep machine learning, and manufactured robotics.
Google wants to own robotics, artificial intelligence, and deep machine learning. My sense is that they understand that they need to get into hardware and diversify beyond ads as their primary revenue stream. What remains to be seen is if they have the chops to ship actual hardware products (robots, home automation equipment, cars, and drones) that are increasingly intelligent and autonomous. If they can, they will be in pole position for 2020 and beyond.
They hired Ray Kurzweil!
The above helps explain the Boston Dynamics, Nest, Meka Robotics, Redwood Robotics, Industrial Perception, Holomni, Bot & Dolly, and Schaft, Inc. purchases, to name a few. These represent somewhat "pure" robot plays, so to speak, although I imagine each of those robotics/AI systems use some combination of proprietary and licensed software/firmware technologies.
Add the very impressive recent AI acquisition, DeepMind technologies. There's Deep Neural Networks, and Viewdle. There is evidence that Google is interested in both industrial and consumer applications and products. Last, but not least, the self-driving car experiments fit neatly into this plan.
Having said all that, I understand one of your points is that none of these acquisitions mean Google actually will ship a product, perhaps especially because Andy Rubin is at the helm of their robotics efforts.
I need to say that I literally cannot stand Google and I am not applauding them or jumping on the Google bandwagon. They have, however been bringing together companies that have a lot in common and speak to a somewhat clear strategy going forward.
Thank you, Facebook for stopping Google from sucking everything into its "membership requirement" maw and gathering even more personal info on us.
One the smartest comment on this subject.
Well said, my friend.
P.S. As for me, as I said in another similar article, I prefer sharing my personal data to FB than freaking googlers .... In another word, any company but google can own my data and do what they wish IF that would help to bring down google.
P.S.S. Larry and The L Team ... you guys cannot win this. Apple, Facebook, Microsoft, Yahoo ... they all are after one goal and one goal only .... take a wild guess what!
They found 450M people willing to pay money instead of using free equivalents from Google, Apple and Facebook.
Perhaps $1/year isn't that much to you but for such a tiny company $450M/year is great revenue.
However I would guess a large part of the appeal was it wasn't owned by FB or Google who are in the business of selling eyeballs and that unlike iMessage was cross platform.
I'm almost inclined to agree, but can you imagine how much sewage those poor Apple servers would have to wade through every day?
This whole messaging thing reminds me of the 90's when every company had their of IM client but now of them talk to each other so if you had lots of friend and were unsuccessful at convincing them all to use the same IM you have to have multiply IM clients running. Then someone will create a client which will bring them all together for you.
One the smartest comment on this subject.
Well said, my friend.
P.S. As for me, as I said in another similar article, I prefer sharing my personal data to FB than freaking googlers .... In another word, any company but google can own my data and do what they wish IF that would help to bring down google.
P.S.S. Larry and The L Team ... you guys cannot win this. Apple, Facebook, Microsoft, Yahoo ... they all are after one goal and one goal only .... take a wild guess what!
Facebook just sells this data back to Google.
So what did Google say about reports they were bidding on WhatsApp? According to Google SVP Sundar Pichai:
“Whatsapp was definitely an exciting product,” he said. “We never made an offer to acquire them. Press reports to the contrary are simply untrue.”
http://www.telegraph.co.uk/technology/google/10662526/Google-did-not-bid-for-WhatsApp.html