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WhatsApp: 2nd Biggest Tech Acquisition of All Time

timothy posted about 7 months ago | from the of-all-time! dept.

Businesses 257

Nerval's Lobster writes "Facebook CEO Mark Zuckerberg decided to drop a cool $16 billion on WhatsApp, a messaging service with 450 million users. It was a mind-boggling sum, even if you buy into Facebook's argument that WhatsApp (which will continue to operate as an independent subsidiary, at least for the moment) will soon connect a billion people around the world. But it wasn't the biggest tech acquisition of all time: that honor belongs to Hewlett-Packard, which bought Compaq for (an inflation-adjusted) $33.4 billion in 2001. Facebook's purchase of WhatsApp comes in second on the list, followed by Hewlett-Packard's purchase of Electronic Data Systems for $15.4 billion; Google's acquisition of Motorola Mobility for $13 billion, and Oracle snatching up Peoplesoft for $12.7 billion. In sixth comes Hewlett-Packard again, with its Autonomy buy in 2011 (for $11.7 billion), followed by Oracle's BEA Systems acquisition ($9.4 billion) and Microsoft seizing Skype ($9.0 billion). What do many of these highest-cost purchases have in common? Many of them didn't pan out. Hewlett-Packard's Compaq, Autonomy, and EDS acquisitions, for example, made all the sense in the world on paper, the tech giant eventually took significant write-downs on all three (Autonomy in particular was an outright disaster, resulting in a $8.8 billion write-off and widespread allegations of financial and management impropriety)." Update: 02/20 19:32 GMT by T : Of interest: Mother Jones has an interesting take on the seeming mismatch between Facebook's business model and the way the WhatsApp founders think about advertising. Hint: they hate it.

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2d biggest? (4, Informative)

Joce640k (829181) | about 7 months ago | (#46297597)

Did they mean "2nd biggest"?

Why not just write "Second biggest"?

Re:2d biggest? (1)

QAChaos (793637) | about 7 months ago | (#46297665)

i 2ded that!

Re:2d biggest? (-1)

immaterial (1520413) | about 7 months ago | (#46297927)

Next time you toot, have the decency to leave the room first.

Re:2d biggest? (5, Funny)

EvilSS (557649) | about 7 months ago | (#46297733)

This is slashdot, obviously it's in hex! So that would make this the 45th biggest in decimal.

Re:2d biggest? (0)

Anonymous Coward | about 7 months ago | (#46297783)

I'm glad you caught this important error. Thank you.

Re:2d biggest? (0)

Anonymous Coward | about 7 months ago | (#46297823)

Nope, WhatsApp is 2 dimensional.

Re:2d biggest? (3, Funny)

Sponge Bath (413667) | about 7 months ago | (#46297877)

This acquisition might involve Mooninites and their obsession with dimensions.

Re:2d biggest? (3, Funny)

ackthpt (218170) | about 7 months ago | (#46297957)

Did they mean "2nd biggest"?

Why not just write "Second biggest"?

There's a patent on that.

Re:2d biggest? (1, Offtopic)

istartedi (132515) | about 7 months ago | (#46298085)

Did they mean "2nd biggest"?

No, since it's all about the combined surface area of screens they meant is 2d.

Re:2d biggest? (0)

Anonymous Coward | about 7 months ago | (#46298285)

Did they mean "2nd biggest"?

Why not just write "Second biggest"?

That's a beta feature...duh...

Re:2d biggest? (1)

FatdogHaiku (978357) | about 7 months ago | (#46298307)

Did they mean "2nd biggest"?

Why not just write "Second biggest"?

The purchase is only on paper...
thus, 2d!

2D (-1, Offtopic)

Little_Professor (971208) | about 7 months ago | (#46297621)

Since when do we use 2d for second? Are we that short of space in the new Beta?

Re:2D (0)

ackthpt (218170) | about 7 months ago | (#46297973)

Since when do we use 2d for second? Are we that short of space in the new Beta?

This is a 2 Dimensional acquisition, not a 3 or 4 dimensional one (either of which would be far more exciting.)

CNN argues it's worth the money (5, Interesting)

rolfwind (528248) | about 7 months ago | (#46297627)

http://money.cnn.com/2014/02/2... [cnn.com]

But I will not tech history in the last 20 years is littered with companies that were bought because of instant messaging in one form or another, stuff like Skype, that later on did not really bring it's parent company anything (eBay sold skype to Microsoft at a loss iirc).

The problem seems to be how to integrate and monetize these services without people jumping ship. Until then, they are hosting a free service that's quite a bit to fund with no obvious revenue stream in sight other than ads.

Of course, Facebook is an expert on that, so it may turn out well for them. Still, amazing returns on a 4 year old company.

Re:CNN argues it's worth the money (4, Insightful)

cheesybagel (670288) | about 7 months ago | (#46297731)

Skype? Hah. Remember ICQ?

The funny thing is Facebook bought for billions a company which makes software running over XMPP. THAT was pathetic.

Re:CNN argues it's worth the money (2)

Pascal Sartoretti (454385) | about 7 months ago | (#46298125)

The funny thing is Facebook bought for billions a company which makes software running over XMPP.

Now that they have plenty of cash, what refrains the WhatsApp founders from starting over a concurrent application ? Especially if Facebook begins to do the evil things that WhatsApp didn't want to do (store messages, sell ads, etc...) ?

Re:CNN argues it's worth the money (5, Informative)

gstoddart (321705) | about 7 months ago | (#46298209)

Now that they have plenty of cash, what refrains the WhatsApp founders from starting over a concurrent application ?

Non-compete clauses in the contract which says they have to give all the money back is my guess.

If you're buying a company, you pretty much try to lock up the top people to ensure they can't say "piss on you, I'll just make it again".

When you sell the company, you also sell the IP -- and then they can pummel you for stealing 'their' idea.

Re:CNN argues it's worth the money (2)

Pascal Sartoretti (454385) | about 7 months ago | (#46298505)

When you sell the company, you also sell the IP -- and then they can pummel you for stealing 'their' idea.

Remember mysql and MariaDB ?

Same (potential) situation here : there is no IP in WhatsApp. Just an excellent execution of well-known idea.

Re:CNN argues it's worth the money (0)

Anonymous Coward | about 7 months ago | (#46298227)

Well, the founder of WhatsApp was given $15,000,000,000 in Facebook stock and put on the board. So he has no reason to act against Facebook's interests.

Re:CNN argues it's worth the money (1)

phantomfive (622387) | about 7 months ago | (#46298241)

Now that they have plenty of cash, what refrains the WhatsApp founders from starting over a concurrent application ?

$3billion in retention bonuses.

Re:CNN argues it's worth the money (0)

Anonymous Coward | about 7 months ago | (#46298435)

$2.999999 billion of which goes to the venture capitalist, as well as a similar percentage of the stock.

Re:CNN argues it's worth the money (4, Insightful)

Solandri (704621) | about 7 months ago | (#46298465)

The funny thing is Facebook bought for billions a company which makes software running over XMPP. THAT was pathetic.

They didn't pay $19 billion for the app. They paid for the userbase. From what I read it's about 450 million, which would make the purchase price about $42 per user. A little steep, but not outlandish in advertising terms. Now they have to figure out how to hang on to those users and grow the user base.

Re:CNN argues it's worth the money (3, Insightful)

greenfruitsalad (2008354) | about 7 months ago | (#46298493)

no, it isn't pathetic. what facebook bought was a large userbase. same goes for microsoft with skype, rakuten with viber, etc.

Re:CNN argues it's worth the money (1)

Grishnakh (216268) | about 7 months ago | (#46297741)

Who cares about people jumping ship? Every big corporation knows that all employees are just interchangeable cogs. If your lead engineers quit in the wake of an acquisition, no problem, you can hire replacements within a week!

Re:CNN argues it's worth the money (0)

Anonymous Coward | about 7 months ago | (#46297939)

They meant USERS jumping ship. Remember ICQ? Or Friendster? Or MySpace?

Re:CNN argues it's worth the money (1)

i kan reed (749298) | about 7 months ago | (#46298153)

I think all of those were sold after the writing was on the wall for anyone who actually understood tech.

Re:CNN argues it's worth the money (1)

Kenja (541830) | about 7 months ago | (#46297849)

WhatsApp is already monetized at 1$ a year subscription. It has more users world wide then Twitter in key nations and demographics where Facebook is losing traction or has yet to make an impact. There is a danger of USERS jumping ship, but Facebook has said they will not implement any changes in the platform any time soon. Long term, I can see it being worth the money in the same way YouTube was for Google.

Re:CNN argues it's worth the money (1, Interesting)

ericloewe (2129490) | about 7 months ago | (#46297971)

Did YouTube ever positively contribute to Google's bottom line?

Even being a data mine (and a stupid way of forcing people to use Google+), I can't imagine it will come even close to paying off in the near future.

Re:CNN argues it's worth the money (2)

bluefoxlucid (723572) | about 7 months ago | (#46298039)

They sell ads on YouTube videos.

Re:CNN argues it's worth the money (2)

i kan reed (749298) | about 7 months ago | (#46298179)

Not only that, they go so far as to pay people for posting videos.

Not that they get any money from adblock leeches like me.

Re:CNN argues it's worth the money (1)

ericloewe (2129490) | about 7 months ago | (#46298401)

Thank you for stating the obvious - I haven't been living under a rock and am quite familiar with YouTube's growing fondness for ads.

Still, we're talking about massive investments in infrastructure and bandwidth, plus paying people to make videos.

A few years ago, they were chin-deep in red ink. It's not easy to get rid of all the red ink.

Re:CNN argues it's worth the money (1)

bluefoxlucid (723572) | about 7 months ago | (#46298675)

God I don't even do that the other 3 weeks.

Re:CNN argues it's worth the money (4, Informative)

Jack9 (11421) | about 7 months ago | (#46298691)

> Did YouTube ever positively contribute to Google's bottom line?

Google bought youtube for about 1.6 Billion

Youtube annual revenue has been over that pricepoint for a few years. CPM on video has always been in dollars, not cents. CPAs frequently pass $10. With up to 3 ads per video, you can understand how google justified the first payments to content providers.

Ballpark numbers:
http://www.forbes.com/sites/ti... [forbes.com]

You seem ridiculously pessimistic for someone who hasn't done any research.

Re:CNN argues it's worth the money (4, Insightful)

ceoyoyo (59147) | about 7 months ago | (#46297981)

I suspect many WhatsApp users have it free. I do. Anyone who used it before they "monetized" doesn't pay. If they change that, or if Facebook starts mucking with it, I'll use something else.

There are a LOT of free texting programs, and it takes about a weekend to write another one. Extracting sixteen billion dollars from WhatsApp is going to be an exercise in futility. Hopefully the WhatsApp people are laughing their way to the bank (and selling their FB stock as fast as they can).

Re:CNN argues it's worth the money (2)

khr (708262) | about 7 months ago | (#46298173)

There are a LOT of free texting programs, and it takes about a weekend to write another one

But this one comes with several hundred million users plus all their phones' address books...

Re:CNN argues it's worth the money (4, Interesting)

ceoyoyo (59147) | about 7 months ago | (#46298233)

Several hundred million users, some of whom have already pledged to quit since Facebook bought it, and many of whom will quit when the first annual renewal comes around and/or Facebook decides to introduce ads.

Besides, FB already has most of their address books. It's begged for mine often enough I'm surprised I haven't accidentally hit yes yet.

Re:CNN argues it's worth the money (1)

BattleApple (956701) | about 7 months ago | (#46298433)

But those who pledge to stop using it probably have several friends that don't care, so they either have to convince all their friends to talk to them on a different app, or stop talking to them altogether. Most of those people will probably give in and continue to use whatsapp

Re:CNN argues it's worth the money (2)

jeffmeden (135043) | about 7 months ago | (#46298117)

http://money.cnn.com/2014/02/2... [cnn.com]

But I will not tech history in the last 20 years is littered with companies that were bought because of instant messaging in one form or another, stuff like Skype, that later on did not really bring it's parent company anything (eBay sold skype to Microsoft at a loss iirc).

The problem seems to be how to integrate and monetize these services without people jumping ship. Until then, they are hosting a free service that's quite a bit to fund with no obvious revenue stream in sight other than ads.

Of course, Facebook is an expert on that, so it may turn out well for them. Still, amazing returns on a 4 year old company.

Free service? It's $.99/year/user so they are currently drawing in about $450M/year and importantly, they are enrolling at a rate of 1M users/day which is adding another $1M to the net revenue, every day. By this time next year, they will have 1B users. Finally, a company charging what SMS is worth (too bad you have to bring your own data plan but I digress).

Re:CNN argues it's worth the money (0)

Anonymous Coward | about 7 months ago | (#46298123)

You mean like Dice buying slashdot?

Re:CNN argues it's worth the money (0)

Anonymous Coward | about 7 months ago | (#46298365)

WhatsApp is like Facebook. They are the biggest guys, but other than market momentum and user base (which are not to be belittled), they don't have anything that separates them from, say AIM and Orkut, technology-wise. For now, this means they stay profitable, but if a startup comes around that is cooler [1], the heavyweight champ title can get wrested away in a period of months.

To me, it is good to have various messaging channels completely separated with well thought out encryption and key management. That way, barring extensive compromise, one hacking organization [2] can't decode all communications.

[1]: Apple can always make Ping 2.0, and almost assuredly, they would likely have a social network rivaling FB's in months.

[2]: The NSA isn't my worry. It is someone who can do some good old fashioned social engineering and get to some sort of admin console (or coerce someone who has that access) to be able to start grabbing stored messages in plaintext.

Sure sounds like something different (4, Interesting)

trifish (826353) | about 7 months ago | (#46297631)

Are you sure it's really a honest acquisition and not a lame attempt to use a portion of your huge pile of money just to monopolize a market you're afraid of slowly losing?

Re:Sure sounds like something different (1)

interkin3tic (1469267) | about 7 months ago | (#46298109)

Judging from the summary and wikipedia article, it sounds a lot like text messaging. Not a social media facebook thing. Facebook has it's own chat, and was trying to get into SMS like functions, presumably hoping that people would leave facebook open on their phones at all time and use it for everything, but that doesn't seem to have gone anywhere.

I think it's probably an honest attempt. I guess they might be thinking that google plus or someone else might successfully integrate text messaging and then topple them, but that sounds pretty far-fetched to me at least.

(Over valued)^2 (4, Interesting)

140Mandak262Jamuna (970587) | about 7 months ago | (#46297633)

Bulk of that 16 billion dollars comes in the form of Facebook stock, which is already heavily overvalued. And some of the retention boni (*) are restricted stock. So over all this valuation of 16 billion is overvalued whole squared.

(*) boni = plural of bonus

Re:(Over valued)^2 (1)

dataspel (2436808) | about 7 months ago | (#46297695)

Good point. This company which sells nothing except advertising is spending so much to buy another company which sells nothing period === The latest tech bubble is upon us.

Re:(Over valued)^2 (0)

Anonymous Coward | about 7 months ago | (#46297749)

even if it's only worth 100 million, that's too much for a company that connects people. seems pretty simple. facebook would do it themselves if they could get the users. so, just buy the companies where your users and your future would-have-been users are going instead of your site.

total leverage of your dominant financial position and probably illegal

facebook will pass. remember myspace?

Re:(Over valued)^2 (1)

BattleApple (956701) | about 7 months ago | (#46298501)

MySpace is back again.
No, MySpace is not back.
Dude, I'm telling you. It's back, okay? I got a profile on there now. The format is sick!
I hope you're right because I'd love to bring back my "Hey, Tom, I'm not your friend," joke.

Re:(Over valued)^2 (1)

DigiShaman (671371) | about 7 months ago | (#46297775)

You know the old adage "Easy come, easy go". Sure it's overvalued. But the investment is smart if you put in and pull out. Don't be the sucker holding the bag.

Re:(Over valued)^2 (1)

master5o1 (1068594) | about 7 months ago | (#46298061)

When did boni become a synonym for bonuses?

Re:(Over valued)^2 (2)

Algae_94 (2017070) | about 7 months ago | (#46298111)

It didn't. When the GP had to put a footnote describing what the word "boni" meant, they should have rethought writing it.

Re:(Over valued)^2 (4, Insightful)

140Mandak262Jamuna (970587) | about 7 months ago | (#46298213)

Well, I was shooting for +1 funny, so did not rewrite it. But God being kind gave me +1 informative, and I now look silly.

2d? (-1)

Anonymous Coward | about 7 months ago | (#46297637)

Facebook is buying up flatlander companies now?

They totally own all the 3d social media and they've had to drop down to 2d. Nice!

My favorite observation... (5, Interesting)

DdJ (10790) | about 7 months ago | (#46297645)

...was when someone commented that Sun Microsystems was worth about one third of a chat service.

Re:My favorite observation... (1)

ericloewe (2129490) | about 7 months ago | (#46298225)

List of things that would have been far more useful than a chat service (out of at least 6 major players, plus a whole bunch of social networks [God, how I hate that term, I feel like throwing stuff at my TV when the term comes up on the news, especially because it's inevitably stupid non-news], so it's not like they're suddenly dominating a market):

Some 40 A380s at list prices (only chumps pay list prices for aircraft, so it'd be even more)
Some 160 A320neo at list prices (Or 15 more if you go for A320s with current engines instead of the New Engine Option)
Nokia's Devices and Services division, just bought by Microsoft, with enough money left to buy Sun Microsystems and still have one billion bucks left.
More than 26.000 flagship smartphones (Take your pick)

Any of the above would be a better investment.
And airlines are notorious for being money sinks.

Re:My favorite observation... (2)

mwvdlee (775178) | about 7 months ago | (#46298387)

social networks [God, how I hate that term]

How about "self-maintaining CRM"?

Re: My favorite observation... (0)

Anonymous Coward | about 7 months ago | (#46298403)

Airlines might be money sinks but I bet the people who lease planes to them don't worry about that.

Vertical Purchase for Addtl Customers (0)

Anonymous Coward | about 7 months ago | (#46297669)

There may be less ads, but don't think any customer won't be rolled into their data analysis. Most wa customers already have a fb account and all it would take is a little digging to get a match.

Talent? (2)

lonechicken (1046406) | about 7 months ago | (#46297671)

Not saying it was a good purchase, but it seems like a lot of these things are purchases of tech talent as well as the products and intellectual rights.

How do they not take a writedown? (2)

phantomfive (622387) | about 7 months ago | (#46297703)

Do they really expect $20million in annual revenue from WhatsApp to grow to cover that $16billion?

The question is, how does Facebook ever hope to recover the cost?

Re:How do they not take a writedown? (1)

CCarrot (1562079) | about 7 months ago | (#46298197)

Do they really expect $20million in annual revenue from WhatsApp to grow to cover that $16billion?

The question is, how does Facebook ever hope to recover the cost?

Apparently the personal data of 450 million users is worth approximately $35 per user to them...are targeted ads really that lucrative?

Who needs advertising when you can sell the comp.. (4, Insightful)

xxxJonBoyxxx (565205) | about 7 months ago | (#46297787)

Who needs advertising when you can sell the company for $16B? They'll just punt the founders and add in-stream/in-text ads related to the content of the text streams the user recently engaged in. Done.

Re:Who needs advertising when you can sell the com (1)

rasmusbr (2186518) | about 7 months ago | (#46297947)

Who needs advertising when you can sell the company for $16B? They'll just punt the founders and add in-stream/in-text ads related to the content of the text streams the user recently engaged in. Done.

The service apparently costs $1 per year with a free one-year trial. Assuming they can get those 450 million (and counting) to go through the trouble of entering a payment method they're going to be making hundreds of millions of dollars without having to hire lots of people to device clever snooping and ad-targeting schemes. Sounds like a surprisingly sound business to me, if they can get the enter payment method flow to work smoothly.

Re:Who needs advertising when you can sell the com (1)

Fwipp (1473271) | about 7 months ago | (#46298129)

Yeah, but even at $500million a year, that's still 32 years till break-even.

I don't really think WhatsApp is going to last 32 years.

Facebook bought WhatsApp to kill it (4, Interesting)

gurps_npc (621217) | about 7 months ago | (#46297805)

It seems obvious. WhatsApp, a product designed to kill abusive telephone policy rules (i.e. charge practically nothing per byte for internet access but a huge amount for the text messaging - when internet costs the corp money while the text messaging is free). WhatsApp is specifically anti-advertisement and Facebook is almost entirely about advertisement.

WhatsApp was a great company and it has been bought about by an evil one that clearly intends to subvert it.

But I can hope that the founders of WhatsApp can use Facebook's money more effectively to create a new anti-advertisement business. Hopefully their use will outway the evil that facebook is about to do to WhatsApp

Re:Facebook bought WhatsApp to kill it (1)

grep_rocks (1182831) | about 7 months ago | (#46298043)

What I don't get is that Whatsapp isn't even a new app, it adds no funcitonality over its competetors - the telcoms have the app (text messaging) and charge a boatload of money for it even though it costs them almost nothing to provide the service - whatsapp is just undercutting in price, the telcoms could cut their price to almost nothing esp. since they already have a revenue stream from voice and data - if the telcos did that whatsapp would be worth nothing and the telcos could try to make up the lost revenue with data plans - what am I missing? this deal seams stupid to me.

Re:Facebook bought WhatsApp to kill it (4, Insightful)

gurps_npc (621217) | about 7 months ago | (#46298081)

You are missing the fact that the telcos are not smart enough to make txt messaging free. They see it as a money maker, rather than a loss-leader.

Their entire philosophy is screwed up - charging people for things that should be free (leaving a contract) and giving away stuff that should cost money (smart phones).

They hope to confuse people and make money off of their stupidity, rather than to offer a simple, clear, fair deal and make money from intelligent choices.

Re:Facebook bought WhatsApp to kill it (3, Insightful)

Carewolf (581105) | about 7 months ago | (#46298281)

You are missing the fact that the telcos are not smart enough to make txt messaging free. They see it as a money maker, rather than a loss-leader.
Their entire philosophy is screwed up - charging people for things that should be free (leaving a contract) and giving away stuff that should cost money (smart phones).

Their policies DO make sense if you don't think about it.

Re:Facebook bought WhatsApp to kill it (2)

Aryden (1872756) | about 7 months ago | (#46298133)

It's about mining data from 450 million users. No one cares that it's nothing new. The customers are what Facebook is buying.

Re:Facebook bought WhatsApp to kill it (1)

Anonymous Coward | about 7 months ago | (#46298289)

Actually, I work with lots of people in the "emerging markets" that WhatsApp targets. The Middle East is one...mobile coverage is pretty good there these days, but the carriers charge insane rates for everything. Like, worse than AT&T-era long distance pricing. In a market like this, where monthly SMS charges are way more than the price of "unlimited talk, text and data" plans we get in the US, WhatsApp wins just because they undercut the carriers.

Buying users and eyeballs (2)

mveloso (325617) | about 7 months ago | (#46297831)

Facebook is buying users, just like people bought eyeballs back in the day. When you push advertising, you need an audience - and if you can't grow it organically, you buy it.

Buying users and eyeballs (1)

Streetlight (1102081) | about 7 months ago | (#46298069)

Any one know the overlap in numbers of FB and WhatsApp users? My guess it's nearly 100%, I don't know for sure.

Re:Buying users and eyeballs (1)

Aryden (1872756) | about 7 months ago | (#46298149)

Highly doubtful. Even Suckerburg isn't stupid enough to spend that kind of money on users he already has. TFA even states that it is an attempt to recoup the users FB has been losing in certain countries where WhatsApp is dominating.

Re:Buying users and eyeballs (1)

khr (708262) | about 7 months ago | (#46298259)

Any one know the overlap in numbers of FB and WhatsApp users? My guess it's nearly 100%, I don't know for sure.

The vast majority of WhatsApp users I know (granted, it's a small enough sample to count on one hand) don't have Facebook accounts. Of course, the total number of people "purchased" increases because I don't use WhatsApp, but I'm in all of their phones' address books, so I'm as good as being in WhatsApp...

Doesn't matter - What's App is another channel (1)

mveloso (325617) | about 7 months ago | (#46298297)

User overlap probably doesn't matter as much as we think, because WA is a totally different channel than, say, Facebook. You have a TV and a computer, so why does Facebook want you on your phone? Because FB wants to be everywhere you - and your friends - are.

Even if WhatsApp never sells ads, it'll allow Facebook to target their ads better. WA knows where you are, when, and where you go, or it can. That can be used for lots of things.

The only better source of data on where mobile phones are and when would be phone company records, which apparently only the NSA can get.

Re:Doesn't matter - What's App is another channel (1)

Streetlight (1102081) | about 7 months ago | (#46298399)

The replies to my post are very insightful. Google and Amazon also have access to all or at least some of this kind of information - Google for the same reason as FB and Amazon to figure out what I want to buy next and already have it on a UPS truck. I (a Prime member) get email from Amazon noting what I recently purchased and what I probably need because of what I bought. I'm convinced the only way to regain my privacy is to cancel my ISP subscription which isn't likely to happen.

Privacy? Is your activity a property right? (3, Insightful)

mveloso (325617) | about 7 months ago | (#46298565)

What is privacy these days? The USPS tracks every letter, or at least takes a picture of it (who knows what they do with that). The phone company always knew who you called, but they didn't care. Your mailman sort of knows what mail you got. Your friends, etc know what you like.

The question isn't about privacy, because that was always an illusion. The question is who do you want to know what?

Do I want google, and by extension advertisers (or entities in the advertising programs), to know anything about me? Amazon? Apple? My phone company? The government?

At least in the US, everyone sort of has an advertising profile. Who gets access to it and why? You have no real control over that.

Sometimes, advertising can be convenient. When you're looking for a car, it'd be nice to get a whole bunch of, say, test drive for dollars coupons.

Sometimes, it can be bad - like when you get medical condition related ads at home when you didn't want anyone else to know.

At some point the public needs to have the ability to take control of this information somehow. It's unclear how that's going to happen. Are online footprints considered property rights?

Re:Buying users and eyeballs (1)

NJRoadfan (1254248) | about 7 months ago | (#46298113)

Except those users aren't paying anything and have no incentive to stay. There is nothing keeping them from fleeing to another service. At least when Google acquired Doubleclick, the business had existing paying customers included in part of the deal.

AOL/TW doesn't count? (3, Insightful)

sirwired (27582) | about 7 months ago | (#46297865)

AOL/TW was, by far, much larger than HP/CPQ.

Re:AOL/TW doesn't count? (0)

Anonymous Coward | about 7 months ago | (#46298095)

But that was DotCom 1
This is DotCom2

No-one remembers , but 1/2 the people learn (the 1/2 that sold out for 16Bzillion dollars)

Re:AOL/TW doesn't count? (0)

Anonymous Coward | about 7 months ago | (#46298141)

...but which one of AOL/TW would you dare to call a tech company?

Re:AOL/TW doesn't count? (1)

Ihunda (642056) | about 7 months ago | (#46298157)

^agreed, which one is a tech company?

HP's Purchase of Compaq Was a Success (0)

Anonymous Coward | about 7 months ago | (#46297875)

It was a success in that it gave HP the scale to stay in the game while IBM, Gateway, etc., sold out or got out.

May be related (4, Insightful)

gmuslera (3436) | about 7 months ago | (#46297943)

WhatsApp issues DMCA takedown notices against alternative clients [github.com] shortly before the acquisition.

Re:May be related (1)

Aryden (1872756) | about 7 months ago | (#46298169)

So they create an API then demand that no one uses it?

Re:May be related (0)

Anonymous Coward | about 7 months ago | (#46298391)

It's not even their API. It's jabber with phone# as id and IME as password

Re:May be related (1)

bluefoxlucid (723572) | about 7 months ago | (#46298415)

The takedown notice is itself unsound. WhatsApp is descriptive of their service, and they're claiming--among other things--that the use of APIs is a copyright violation (established Microsoft v. IBM not) and that mentioning WhatsApp is a trademark violation (Trademark means that you cannot use it as an endorsement or to label an unaffiliated product; mentioning that Product X is Product X is exactly what Trademark is for).

A Fun Facebook Game (0)

Anonymous Coward | about 7 months ago | (#46297955)

Here's a fun game to play: Whenever you read an article about Facebook, mentally replace "Facebook" with their original name "The Facebook."

Sometimes I just can't think of a subject (5, Interesting)

sootman (158191) | about 7 months ago | (#46297991)

At the other end of the spectrum, the biggest bargain ever was NeXT acquiring Apple for negative $429 million.

What FB fails to see... (1)

Slartibartfast (3395) | about 7 months ago | (#46298099)

Is that the whole reason a service like this exists, when essentially all those users already have FB accounts, is because it *ISN'T LIKE* Facebook. It's uncluttered, and straightforward. It's the un-facebook. And they'll just break it by trying to monetize it.

Good (0)

Anonymous Coward | about 7 months ago | (#46298119)

It will hasten the death of Facebook

Whatsapp actually isn't lame but still (1)

Ihunda (642056) | about 7 months ago | (#46298121)

I thought whatsapp was lame until I installed and was able to chat and share photos with friends in a few seconds... But still some Erlang code over XMPP isn't worth 16 billions to somebody who already has the user base and developer talent to do the same thing overnight...

why the big price (0)

Anonymous Coward | about 7 months ago | (#46298177)

that's what I was asking until I saw that Google had offered $10 billion so it was a bidding war or something like that.

I'm not a fan of facebook purchasing up any and all growing social media businesses.

Yay Social Media Advertising Bubble!! (4, Interesting)

ErichTheRed (39327) | about 7 months ago | (#46298247)

I think it's time to call the near top of the social media bubble. Maybe this one will be called the Web 2.0 Bubble.

It's funny, because I remember the last tech bubble in the 90s ending a few months after similar insane acquisitions. Remember when AOL was bought by Time Warner because they were panicked that they would be left behind in the Web 1.0 future? How about all the IPOs of completely unprofitable companies based only on the fact that they sold stuff online or were funded by advertising?

I think whether this turns out to be a bubble or the "new normal" depends on how well these social media companies and device manufacturers can present themselves to the average joe as "the internet." Remember that AOL used to be "the internet" for anyone non-technical. People keep predicting the death of PCs simply because anyone under 25 uses tablets and phones as their primary computers, considers email old fashioned, and lives on Facebook. The question is whether this is universally true or just some hipster marketing buzz. I know people who live on Facebook, people like me who use it to post family pictures, and people who actively hate it. I think it could go either way, but the market for this stuff is way too frothy now. Even my boring corner of IT is being bombarded by cloud this and cloud that, and it's touted as the solution for everything.

The strange thing is this -- during the 90s, I was a new grad riding out the dotcom boom in one of those "boring" corners of traditional IT (sysadmin for an insurance company). This time around, I'm in a different "boring" corner of IT (systems architect in air transport). The plus side of this is that I never got laid off during the bust cycle. Marketing flash may sell IPOs, but people who actually know their stuff get to keep working when most of the fluff gets thrown out. Oh well... At least the 90s tech boom sparked a huge Internet build-out, oh, and left a lot of Aeron chairs on eBay. :-)

DELETED!!! (0)

Anonymous Coward | about 7 months ago | (#46298283)

DELETED!!!

Why Whats App was/is big in Asia/India (3, Interesting)

140Mandak262Jamuna (970587) | about 7 months ago | (#46298339)

This is what my Indian cousins tell me. India has huge number of plain dumb cell phone users. It also has a decent chunk of smartphone users. Whats App bridges the gap. It allows dumb phones and smart phones to interoperate. It allows sending SMS from smart phones/internet to dumb phones. In India and most Asian countries all incoming calls/texts are free. So a smart phone user can mix dumb phone numbers and smart phone numbers in the broadcast list and send out messages. Dumb phones have varying degrees of multimedia support and they get to see as much as their phones would support. It allows users to send out one text message to Whats App portal and it relays the messages to all other recipients. Thus you pay for one out going text but manage to send it to multiple people. Most importantly it allows text messages to travel across the internet to multiple countries helping you avoid international texting charges.

When my cousin visiting USA texted to his brother in Singapore, the Singapore brother was like, "what? you got money growing in trees? Why send regular text when you have Whats App?"

But dumb phones market share is shrinking, Smart phones don't ever pay for international texting rates, they have more options... So I don't see Whats App growing any bigger than what it is. I am not sure people would be willing to pay more than a dollar or two per year for Whats App in smart phones. But I could be, and frequently have been, wrong.

AOL Time Warner doesn't count? (0)

Anonymous Coward | about 7 months ago | (#46298357)

I would put AOL Time Warner as the biggest tech industry acquisition...

I hope the payment was cash and not stock (3, Insightful)

damn_registrars (1103043) | about 7 months ago | (#46298425)

I don't expect that $16.5B worth of facebook stock will be worth much in another couple years.

Re:I hope the payment was cash and not stock (1)

neo-mkrey (948389) | about 7 months ago | (#46298613)

You have more faith in FB stock than I do. I think it will be back down below 40 by the end of the year.

Social Media bubble... (1)

Aphrika (756248) | about 7 months ago | (#46298549)

We've had the dot.com bubble. It's only a matter of time until the social media bubble bursts. Currently this seems to be defined as "we'll value your company on how many people use it" or "we're buying your user base", not tangible assets and value... crazy.

Old Fashion Question (1)

msmonroe (2511262) | about 7 months ago | (#46298575)

How does WhatsApp make money? I am not seeing that anywhere? How does this add value to FB? I guess the VC's will at least get their money back out that they invested. That's good, right?

Dear Mark Zuckerberg
Why spend 19 billion on a company that is unlikely to add value to FB and what's more the users are unlikely to want to pay money to use the service?

They bought them BECAUSE of that stance (1)

SuperKendall (25149) | about 7 months ago | (#46298591)

Facebook itself earns money from ads because that's the only way it can work.

Whats App Makes money the "real" way, by totally abandoning ads.

But in the middle is the network of connections between people. Facebook is much better off begin able to acquire this network information from both people who don't care about ads and those that do.

Even if all the information did was improve ads served to the people that didn't care about them, it would probably be worthwhile.

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