What cracks me up is that Facebook paid 19 billion for Whatsapp, and they didn't even buy the vertical by a longshot. Wechat is growing like crazy and has 355 million...not so far behind Whatsapp's 450+. And that's just one IM network among many. How many wolves are they planning on feeding?
I mean, if mk can roll up a chatting app it's not like there are serious barriers to entry. That's the thing about Oculus - mmmmkay, you've got screens and headphones and gyroscopes, oh my. And now the company that invented the Trinitron and the Walkman says they're gonna do it too. Granted - Sony has been stumbling over every major tech innovation since Microsoft was a bunch of rebels in Redmond but they kinda have something to plug it into already. Oh, but Rift is open, Sony is closed. Said Zuckerberg's bitch.
Yep. There's no evidence that people want that experience so much that it's worth the costs. I guess it would be fun to play multiplayer Halo or whatever, but that's about the extent to which I want to slap a screen on my face. Facebook bought something that has no legs outside the gaming market.That's the thing about Oculus - mmmmkay, you've got screens and headphones and gyroscopes, oh my.
To look at it from the other side though, what if you didn't get all strategerie about it and just did some napkin math on the value of Whatsapp users: Facebook revenue per user is about 9 bucks per year. Monetized at the same rate, that's over 4 billion in revenue for the Whatsapp network, per year. On one hand, they can't monetize them anywhere close to that rate yet, but on the other hand, they'll seek to and the number of users is growing. Oh yeah, and that's revenue, not profit. When I look at the acquisition as a defensive strategic play, it looks terrible, but if I look at it just nuts and bolts....well, I honestly don't know enough to value it properly, but it doesn't look overtly abysmal. I was on a car ride with mk this past Fall and was telling him about an idea I had for a messaging app. I wish I was a software engineer because I think that messaging apps are actually quite difficult to implement. Syncing is a real challenge. People are out there doing it left and right, but I swear to god Apple can't implement services to save its life. iMessage is the buggiest, conversation losing-est, least "it just works" IP messaging app I've ever used by far. I thought AOL had this sorted out in the 90's...
It's overtly abysmal. By the numbers: - WhatsApp has a revenue of $20m/year - Does not do advertising, charges s buck a year per user second year onward - Facebook paid $42 per WhatsApp user A little more math: WhatsApp has 450 million users. It made $20m off them. It has no advertising at all. That means roughly one in 200 WhatsApp users have ever given the site any money (I know I haven't - didn't even know they charged!). With the current business model, Facebook needs 405 billion people to use WhatsApp before it turns a profit. Which is going to be a hard thing to do unless they've struck a deal with the Core Worlds of The Old Republic. Or they need to make WhatsApp a factor of 400 more profitable amongst current and future customers. These are people who don't use Skype because it's expensive. At a penny a minute. iMessage does suck bilgewater, and I'll tell you why. Apple uses a proprietary mishmash of iPV4, iPV6, Apache, Samba and VNC , the makeup of which changes on whim. They also took their home-grown SMB proprietary in 2011, thereby making it nearly impossible for 3rd parties to integrate with it. It's haxie as hell and a company with that much clout and marketshare should really know better. But they don't, and iCloud is a mess, and nobody wants to use iWork, and iChat is pure shit. They offered to buy Dropbox in 2010 for a billion dollars and Dropbox said "no thanks, you don't have your shit together and if you ate us you'd fuck us up, too." Kinda see why.
Yeah, I'm working on the assumption that Facebook is absolutely not going to stick with Whatsapp's business model. They probably chuckled and patted it on the head when they first encountered it. Could be wrong. iCloud is terrible. It is so very clear why Jobs wanted Dropbox. It is the very epitome of "it just works". I love Apple products (that aren't services), but I am SO GLAD Dropbox refused to sell to them. So glad. I wish Box had more consumer application support and wasn't so enterprise-centric, I snagged 50GB of storage/yr free in perpetuity (it's actually a great strategy for them I'm just being selfish). Apple should just build a new Box/Dropbox app from the ground up, platform agnostic, put it on all their home screens, and kill iCloud. It would make me want to buy their hardware more.