Was Mark was looking to buy BBM
- Many of you know that When Blackberry decided to sell itself(Or a Part of it) Back Then We heard Mark Zuckerberg(Facebook CEO)was in Talks with Blackberry.Now we really know Mark was looking for a decent social messaging app ,Could the Talks Back then be related with Acquisition of BBM.I know i am looking among a mist of possibilities but Acquisition of Whats App for 19 Billion $ sure raises a lot of questions.So what do you guys think?.02-20-14 07:06 AMLike 0
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- Many of you know that When Blackberry decided to sell itself(Or a Part of it) Back Then We heard Mark Zuckerberg(Facebook CEO)was in Talks with Blackberry.Now we really know Mark was looking for a decent social messaging app ,Could the Talks Back then be related with Acquisition of BBM.I know i am looking among a mist of possibilities but Acquisition of Whats App for 19 Billion $ sure raises a lot of questions.So what do you guys think?.02-20-14 08:29 AMLike 0
- 16 goes to whatsapp the company, 4 cash, 12 stock.
The other three is to the founders and employees over four years. And it's in stock.
According to Chris (the cb expert on these matters):
It breaks down like this: WhatsApp shares are being converted into $4 billion of cash and $12 billion in Facebook stock. So Facebook is actually paying $16 billion for WhatsApp the business. But they're issuing another $3 billion in restricted stock to founders and employees of WhatsApp, and this is obviously comparable to stock based compensation that employees typically get, so it's not really part of the acquisition price.
Key sentence is the last one.Last edited by stabstabdie; 02-20-14 at 11:46 AM.
02-20-14 09:33 AMLike 0 - It came out earlier that BB was the one that asked FB for the meeting, and so FB agreed to be polite, but weren't really interested in BB. I suspect that was more due to the fact that FB doesn't want to be a phone manufacturer rather than because FB finds no value in BBM, but either way, FB's acquisition of WhatsApp was more about getting 450M users and their data than about buying a messaging service.
It's been said that the value of a social network rises based on the SQUARE of the number of users, meaning the value comes from having more users. 450M users means a big value.02-20-14 12:27 PMLike 4 - It came out earlier that BB was the one that asked FB for the meeting, and so FB agreed to be polite, but weren't really interested in BB. I suspect that was more due to the fact that FB doesn't want to be a phone manufacturer rather than because FB finds no value in BBM, but either way, FB's acquisition of WhatsApp was more about getting 450M users and their data than about buying a messaging service.
It's been said that the value of a social network rises based on the SQUARE of the number of users, meaning the value comes from having more users. 450M users means a big value.02-20-14 03:09 PMLike 0 -
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If he is correct, then 16 billion is a bargain.
450 million squared is 2.025 x 10 to the power of 17. I have no idea what that number would be called but it's like 8 more zeros.02-20-14 03:25 PMLike 0 -
Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2). First formulated in this form by George Gilder in 1993,[1] and attributed to Robert Metcalfe in regard to Ethernet, Metcalfe's law was originally presented, circa 1980, not in terms of users, but rather of "compatible communicating devices" (for example, fax machines, telephones, etc.)[2] Only more recently with the launch of the Internet did this law carry over to users and networks as its original intent was to describe Ethernet purchases and connections.[3] The law is also very much related to economics and business management, especially with competitive companies looking to merge with one another.02-20-14 05:26 PMLike 2 - Metcalfe's law - Wikipedia, the free encyclopedia
Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2). First formulated in this form by George Gilder in 1993,[1] and attributed to Robert Metcalfe in regard to Ethernet, Metcalfe's law was originally presented, circa 1980, not in terms of users, but rather of "compatible communicating devices" (for example, fax machines, telephones, etc.)[2] Only more recently with the launch of the Internet did this law carry over to users and networks as its original intent was to describe Ethernet purchases and connections.[3] The law is also very much related to economics and business management, especially with competitive companies looking to merge with one another.
Here's an example of the difference if you would agree that whatsapp it's a messaging service, is a social network.
Imagine a network of 100,000 members that we know brings in $1 million. We have to know this starting point in advance?none of the laws can help here, as they tell us only about growth. So if the network doubles its membership to 200,000, Metcalfes Law says its value grows by (200,0002/100,0002) times, quadrupling to $4 million, whereas the nlog(n) law says its value grows by 200,000 log(200,000)/100,000 log(100 ,000) times to only $2.1 million.
http://www.forbes.com/sites/anthonyk...s-using-zipfs/
In this case it should be more like 3.9 billion if you agree with Metcalf.
This isn't an area m of mine, I haven't even thought about economics since my first year university course, and that didn't go well, so I could be way off.02-20-14 05:37 PMLike 0 - anon(153966)DistinguishedI just want to mention that Facebook simply bought the user base from WhatsApp. It just happens to come with an app. Just saying...BreakingKayfabe likes this.02-20-14 05:43 PMLike 1
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Look at FB's current valuation - it's a reflection of the number of active users, not a reflection of the current revenues FB is generating. And that's why WhatsApp was valued so high: the large number of users. It was the users, and the user data, that FB wanted, not the app itself. FB could code WhatsApp in a couple of weekends. The hard part is getting users to use it.JeepBB likes this.02-20-14 11:20 PMLike 1 - You're taking it a little too literally. The point was that, with a network, the value of the network doesn't grow linearly with the growth in users, it grows logarithmicly, meaning, at a much faster rate then the linear growth of the users. The actual numbers are never going to be an exact figure, because these are valuations (i.e., the opinions of the buyers and sellers), not fixed formulas. It's a way of saying how a larger number of users is much more valuable than most other factors when determining the value of that network.
Look at FB's current valuation - it's a reflection of the number of active users, not a reflection of the current revenues FB is generating. And that's why WhatsApp was valued so high: the large number of users. It was the users, and the user data, that FB wanted, not the app itself. FB could code WhatsApp in a couple of weekends. The hard part is getting users to use it.
I would think that my argument still stands.
Either way, it's a **** load of money, so I suppose it doesn't really matter.02-21-14 05:58 AMLike 0
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