Is WhatsApp really worth $19 billion dollars?

By Leave a Comment

I was shocked to learn that Facebook purchased WhatsApp for a total of 19 billion.   My knee jerk reaction was that Facebook overpaid, especially as I contemplated that currently WhatsApp is charging $1 per user per year, and have 450 million users.   450 million dollars in revenue in quite negligible to Facebook’s overall bottom line.    Thinking back to Mergers and Acquisitions class, our professor kept pounding on finding the synergies in a deal… 1+1 = 3 in order for a merger or acquisition to work.  So, searching for those synergies, I think there are some ways where this acquisition will be justify the purchase price and ultimately generate more revenue that was used to purchase it:

  • Recurring Revenue and increasing the user base – The management team at WhatsApp believes that they can increase their current install base from 450 million to about 2 billion.   And although the subscription price is just $1 per year, this is recurring revenue and the subscription based model of revenue generation is a gold mine.   If WhatsApp can generation 2 billion dollars of revenue a year, they will be well on their way to becoming a solid acquisition.  And that’s before Facebook introduces their advertising platform into the program.  I realize that Mark Zuckerberg is on record saying he doesn’t believe in advertising in messaging platforms, but I expect that to change in a few years as the firm matures and looks for for revenue channels to increase shareholder value.  But monetizing isn’t the big question today.  The big question is:  How will they get to 2 billion users?
  • Reach into emerging markets – WhatsApp is signing a whopping 1 million users each day.  Think about that for a minute.  Entire cities of people are signing up to use WhatsApp every single day.   It appears the vast majority of those users are in emerging markets, markets that Facebook does not have as deep a reach in.  This acquisition gives Facebook access to those markets.

  • User Engagement – Facebook’s active daily engagement is 61%, WhatsApp’s is 70%.   What’s more is that WhatsApp has become the de facto way to communicate and share pictures in the emerging markets, where it more likely that a person will have a smart phone than a computer.   Facebook’s late entry into the mobile space hurt them here, and although they have been making strides, WhatsApp was too far ahead.  I couldn’t find any data which discussed how long a person stayed, but I imagine that it’s a significant amount of time.  The longer an application has eyeballs on it, the more ads it can see and the more potential for revenue generation occurs.

    This chemical causes relaxation of purchase levitra online find for more smooth muscles of the penile organ thus allowing proper flow of blood towards the penis making it flexible and the nerves wide in form. If ED becomes frequent, make sure to see the doctor as a result of the problem you face may very well free get viagra be an ovarian cyst. After studying the behaviors and impacts of many hypertensive remedies the physicians recommended the implementation of this drug to treat all most every hypertensive case in order to prevent the associated developments of heart deformations. viagra tab These pills contain best prices on cialis natural ingredients which do not pose any side effect to their health.

Essentially the folks at Facebook believe that they will make way more money than the 19 billion to be paid.   Will they reach that?  Only time will tell.   Another point that my professors kept making was that 70-80% of mergers and acquisitions fail.  There are definite hurdles for WhatsApp/Facebook deal to overcome.  We wont know for a few years as to how successful it is.

I’m sure the folks at SnapChat are very happy, as the valuation of their product went through the roof after this announcement.

Remembering Sanya and how short life is

By Leave a Comment

I’d like to take a break from the normal business musings I put up here  and speak about a sudden and tragic death in our family.   We lost a beloved daughter, cousin and friend today.  Sanya was just 20 yrs. old, in her last semester at Cornell University.   She was just walking home from her last class of the day and collapsed.  We don’t know exactly what happened after that, but we do know that the paramedics said they were at the scene within 5 minutes and she was at the hospital within 10.  Unfortunately, that wasn’t enough time.    The official cause of death was brain death, but we really don’t know what caused her to collapse in the first place.  She did have some sever allergies but the doctors tell us that those wouldn’t cause this type of reaction.   The family fought hard to keep her alive, holding on to the smallest thread of hope that she would come out of it.    But looking back on this, it appears that she was probably already dead when she came to the hospital.

Sanya was truly special.  She had an artistic side, which shown through in her drawings, her photography and her music.  She wanted to be a neurologist, and wanted to start clinics for the poor and needy with her parents, who are also scientists.  When I first met Sanya, I knew her to be a very shy person, who had real difficulty opening up.   Then she went to college and blossomed into this dynamic person.   Her time at Cornell really brought out her personality.

She was an only child.  Although we have all felt the effects of her passing, her parent’s grief is something that can’t be matched.  I am not sure if they will ever get over this, but it will take them a very long time to pick up the pieces and try to put their life back together.

The outpouring of love that Sanya and her family received during this time was overwhelming.  There must’ve been at least 50 people in the ICU waiting room at any given moment while we were there.  Most people camped out in the waiting room and stayed for days at a time.  During the weekends the number of people staying in those same  waiting rooms swelled up to at least 100.   A mixture of friends (both Sanya’s and Sanya’s parents), family (both near and far), and even co-workers came to give their support.   Even now, the amount of people coming to Sanya’s home to offer support has not subsided.   It is very easy to just pay your respects and move on with your own lives, but these people have taken time out of their lives to support the family.   Even if they just sit there and not say a word, it is very helpful.  All of your support is truly appreciated.   I’d also like to give our thanks to the doctors and nurses at Cayuga Medical Center.  They were very patient with us, as we constantly broke the rules on the amount of visitors allowed.  They even offered us beds, pillows, blankets and rooms to sleep in.   We are truly grateful for your compassion during that difficult time.

This has been quite the wake up call for me.    Life is really short, and it is so easy to get caught up in your work, especially when you are building a business.   But, I believe in the truism, that at the end, you won’t regret that you didn’t spend more time in the office.   Sanya woke up that morning, and she fully expected it to be a normal day.  She was going to go to class and come home to hang out with her friends.  I doubt that it ever crossed her mind that that day would be her last day.   It’s truly amazing that you don’t know, when, how or where you will die.  But we are all mortal’s and our life is finite.  All we can do is make the most of our time here, and leave a mark on those we leave behind.  Sanya left a mark.  It was evident on the amount of love and support she got during her last days.  Her parents are leaving a mark, as evidenced by the amount of support they are getting now.  I hope that I can leave even 1/10 of that type of mark, and will work to do so.

But before all that, I’m going to go home and hug my family extra tight tonight.  I hope you will to.

Key Takeaways

  • Life is short.
  • You will never know how, where or when you will die.  It can’t be controlled.
  • What can be controlled is how you live your life and what kind of mark you will leave.
  • No one ever regrets not working enough in the office.  They do regret not spending enough time with loved ones.
  • You can still change that and leave the mark that will last way beyond your years.

These medicines basically work on the same mechanism of improving super cialis canada click for more info blood flow near male reproductive area and makes the organ able to erect for pleasing plus satisfactory physical intimacy. So, I have tried to clear out significant ordering generic viagra blocks of time. Because of this, it is important to note that erections will not occur from merely taking this buy viagra line downtownsault.org medication. It is purchase cialis online http://downtownsault.org/wp-content/uploads/2016/01/2016-Outhouse-Race-Registration.pdf also a major ingredient of several medicinal preparations in the Unani system of medicine.