Three Stats that Explain the WhatsApp Acquisition

$19bn wasn’t as crazy as some might think

$19bn wasn’t as crazy as some might think

WhatsApp is going to go down in history as one of the great business exits (not to mention an amazing rags-to-riches story). There have been lots of long articles on why it did or didn’t make sense, but I think it comes down to this:

• In 2009, Facebook gained 200 million users. In 2010, it gained another 250 million. It hasn’t had quite that growth since then.

• WhatsApp is gaining a million per day—possibly even growing faster than Facebook ever did. Mark Zuckerberg must have looked at it and felt as if he was viewing a version of his own story from the outside.

• IM isn’t like a throwaway app that people try in a week and then never go back to—it is incredibly sticky. Consider how the IM program QQ morphed into Tencent, which now has a $100bn market cap.

For half the market cap of Twitter, not a bad buy, huh?

I remember when people thought Google overpaid for Youtube. Now that looks like they practically stole it. Time will tell if this will play out in the same way, but I suspect it might.

Separately, I’m interested in seeing what happens at the intersection of asynchronous social networking and synchronous instant-messaging; it feels like we’ve only scratched the surface of the possibility space for a wide range of applications.

Full disclosure: I’m long FB.