What Americans need to understand about Facebooks buy of Whatsapp ?
On Thursday morning I woke up to the news that Facebook has brought Whatsapp for $19B. My first reaction was 'Holy Cow'. I was more shocked at the sheer amount, than the fact if 'Whatsapp' is worth the money. The whole discussion about the purchase has been limited to two topics 1. What else could be bought for $19B ? 2. Is Whatsapp useful at all ? (Especially by Americans who have never heard of this application before) The first looks at different companies that have less market cap which include iconic companies like Harley Davidson, Airline company etc. All these comparisons are stupid as we are talking about apples and eggs. Facebook is in a business of connecting people online. Whatsapp does precisely that at costs which are very low and is making profits. For example it charges $1 per year after an year. Even if 25% of the 450M users have paid, it would mean more than a $100M of revenue. With a 55 member team and basic servers (remember it does not ...