We asked Daniel Kröger, portfolio manager at Acatis Investment to make a guest contribution. He is a well-known expert on media and Internet stocks and can be found on Twitter at @eflation.
Whatsapp is a success story as you write only the Silicon Valley. Five years ago, Jan Koum and Brian Acoton, two Ex Yahoo employees, founded the company Whatsapp with the goal of replacing the multimedia messaging service (MMS) of telecom companies. The success is reflected in the user base (currently 450 million), which has grown three times as fast as the Facebook user base. Every day 1 million new users are added. Currently, each user pays $ 1 a year, equivalent to $ 450 million. With 32 employees and no advertising costs, the $ 14.1 million sales per employee - a proud sum.
Now Facebook Whatsapp has taken over for 19 billion dollars - 4 billion in cash, 12 billion in Facebook shares and 3 billion in stock options. Thus, each Whatsapp user has a value of 42 dollars. For comparison, a Facebook user is $ 152, a Twitter user is $ 124.
Is this too expensive?
No. The deal is an investment in the future.
Mark Zuckerberg has the vision of mobile "supremacy" - every app with which a user spends much of his "online time" should be a Facebook app if possible. Zuckerberg already proved this with Instagram. The takeover of Snapachat for 3 billion dollars has not been successful in the past, now with Whatsapp a strong counter-weight has been created.
The cut between Whatsapp and Facebok users is very large. From the daily 50 billion sent messages and the contact book of the individual users can be collected valuable data. These help in the future the advertising messages on the Facebook pages and the app even more targeted. This is precisely the added value for Facebook, which is why the company could also afford to keep Whatsapp ad-free. Zuckerberg sees enormous growth in the number of users. With the current growth, which is gaining momentum with other users, the 2 billion barrier is quickly reached in 6 years.
Lastly, the growth figures at Facebook have fallen in the young target group. With Whatsapp it is counteracted. Many young users spend several hours every day to get pictures and videos. The business model also shows that there is no Moat in the industry. From today to tomorrow you can sleep a trend and a next big player is at the door. Well, if you have a war fund to buy such companies. Whether Whatsapp is the best product, and the best data protection intentions are pursued, be set.
The outcry in the social networks, the media and the Whatsapp users will be great in the next few days, however, just as quickly. The share was down 5% after the stock market, but investors will quickly realize the importance of the deal for Facebook.
In 10 years we will no longer send emails and only communicate via messenger services. At the latest, the last doubter will also mark the purchase of Mark Zuckerberg as a stroke of genius.
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