WhatsApp: 2nd Biggest Tech Acquisition of All Time

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.

2d biggest?

[Joce640k]

Did they mean "2nd biggest"?

Why not just write "Second biggest"?

Re:CNN argues it's worth the money

[gstoddart]

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

[Jack9]

> 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.