Wednesday, February 19, 2014

"Whatsapp" With That Revenue Multiple? $FB

From WSJ article:

450. WhatsApp has more than 450 million active users, and reached that number faster than any other company in history. It was just nine months ago that WhatsApp announced 200 million active users, which was already more than Twitter. Every day, more than a million people install the app and start chatting, and they remain more engaged with WhatsApp than on any other service. Incredibly, the number of daily active users of WhatsApp (compared to those who log in every month) has climbed to 72%. In contrast the industry standard is between 10% and 20%, and only a handful of companies top 50%…

1. Jan keeps a note from Brian taped to his desk that reads “No Ads! No Games! No Gimmicks!” It serves as a daily reminder of their commitment to stay focused on building a pure messaging experience. This discipline is reflected in WhatsApp’s unconventional approach to business. After one year of free use, the service costs $1 per year — with no SMS charges. This can save users trapped in expensive data plans up to $150 per year…
So, even if all 450 million users started paying the $1 per year, you're looking at $450 million forward revenue. Facebook just paid 42 times that revenue number. No big deal.


Joe Nelson said...

I've seen the $1/year fee quoted everywhere. WhatsApp even tried to charge me that same $1 fee once. Once. I was never required to pay though. I've been using it since 2010 and I know I'm not alone in this regard.

We'll get more information soon, but even revenue of $450 million/year seems like a stretch to me.

CP said...

What are you using it for? What purpose does it serve?

Joe Nelson said...

I rarely use it at all anymore. In fact, I probably haven't used it in over a year. It was useful when many friends and family didn't have unlimited text messaging plans, but those are standard these days. Basically it allowed for text-type messages to be sent for free anywhere in the world to any other WhatsApp user. No data charge, no text charge. Sort of like how blackberry messenger used to work between blackberry users (before it was opened to all in 2013).

These days if you are a US-based user, it serves almost no purpose. At least, for me or any of the people I keep in touch with.

If they even threatened to charge me now I'd delete the app from my phone instantly and never look back.

CP said...

That's incredible. The only people who need it... are people who can't afford unlimited texting.

Some advertising market!

Joe Nelson said...

Ads? They don't need no stinkin' ads.

"Why we don't sell ads

Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we dont need. - Tyler Durden, Fight Club"

I pulled that right from

This is brilliant! The headline writes itself: "Company Whose Revenue Depends on Ad Sales Spends $19 Billion on Company That Hates Advertising"

How many thousands of open sales positions are there at Facebook right now? Many. What are they selling, I wonder?

CP said...


This bubble has officially jumped the shark.

Strap yourself in and load up on long duration Treasuries.

AllanF said...

officially jumped the shark

Too true. I don't know if this will prove to be the bell ringing in the top, but if it is, it will certainly be noted as such in all the history books.

One other thing. Don't take Silicon Valley at face value. SV operates as a mafia. Connected billionaires sell favors to each other all the time. It's like the old saying, "follow the money." You have to look at who are What'sApp's angels and VC's. They are almost certainly the same guys that were early investors in FB, Linked In, and Twitter. The ones that are big enough get their own IPO's. The one's that are too laughable to even get past the SEC are bought by the ones that already have IPO'd. Nice work if you can get it.

CP said...

I think the $20 billion is more than FB *cumulative revenue*, no?

Agree with Allan's cynical take. Although, I think it's more that the VCs are unloading this stuff at insane valuations on the public.

AllanF said...

Although, I think it's more that the VCs are unloading this stuff at insane valuations on the public.

That's what I was saying. The billionaires I was referring to are the VC's. The favors are the insane valuations.

Z, long before anyone outside of SV heard of him, showed he'd play ball. So now the guys that made Z come to him and call in their favor, although at this point he's one of them so calling in a favor isn't quite the right way to describe it. Z is the face to Silicon Valley's industry the same way Obama is the face to Wash DC's industry. They're the guy in the suit/hoodie reading from the tele-prompter, but there are not the ones calling the shots.

eah said...

FB has a secret master plan ... bwaahahaha. I think once Zuckerberg gets the amnesty he so desperately seems to want, he'll make sure all the newly legal get Obamaphones and the government will pay the $1 fee. That's gotta be, what? Another $20m.