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Google's offer lacked the board seat Facebook gave up

Yesterday we mentioned that Facebook had plunked down a huge amount of cash to buy the WhatsApp messenger service. The purchase cost Facebook a whopping $16 billion in cash and stock.
 
A new report from Fortune claims that Facebook wasn’t the only major tech firm sniffing around WhatsApp. Google also reportedly made an offer to buy the company for $10 billion.
 
Google's offer was not only significantly less than the one made by Facebook, but the Google offer also reportedly didn’t come with a seat on the board as Facebook's did.
 
Many of our readers have commented that they are flabbergasted as to why such a simple app would be worth so much money to Facebook and the reasons are quite simple. The service has 450 million active users and is gaining one million new users each day. Many companies would kill for the information that can be skimmed from those users.
 
As Facebook CEO Mark Zuckerberg said in a conference call following the announcement, "WhatsApp is the only app we’ve ever seen with higher engagement than Facebook itself."

Source: CNN



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By amanojaku on 2/20/2014 3:26:49 PM , Rating: 2
That only proves the point that the purchase is silly. You know FB will integrate WhatsApp into its site. The reason WhatsApp became popular, outside of offering SMS over data, was the privacy: people can't browse your stuff on WhatsApp like they can on FB. Give it a year or two; I'm sure FB will fix that little problem. Plus, FB may be purchasing users it already has.

The only upside to this is that WhatsApp will be the first product FB owns that generates revenue from users instead of advertising. But at a dollar per user per year, the $400M earned annually will take close to 50 years to pay off the $19B (it's $19B, not $16B).


By Shlong on 2/20/2014 4:29:48 PM , Rating: 2
Not really, Instagram hasn't changed all that much since Facebook bought it. I've seen about 2 ads in the past 6 months (open the app multiple times a day) but that's about it.


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