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WhatsApp: 2nd Biggest Tech Acquisition of All Time 257

Posted by timothy
from the of-all-time! dept.
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.
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WhatsApp: 2nd Biggest Tech Acquisition of All Time

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  • by cheesybagel (670288) on Thursday February 20, 2014 @03:41PM (#46297731)

    Skype? Hah. Remember ICQ?

    The funny thing is Facebook bought for billions a company which makes software running over XMPP. THAT was pathetic.

  • by xxxJonBoyxxx (565205) on Thursday February 20, 2014 @03:45PM (#46297787)

    Who needs advertising when you can sell the company for $16B? They'll just punt the founders and add in-stream/in-text ads related to the content of the text streams the user recently engaged in. Done.

  • by sirwired (27582) on Thursday February 20, 2014 @03:50PM (#46297865)

    AOL/TW was, by far, much larger than HP/CPQ.

  • May be related (Score:5, Insightful)

    by gmuslera (3436) on Thursday February 20, 2014 @03:57PM (#46297943) Homepage Journal
    WhatsApp issues DMCA takedown notices against alternative clients [github.com] shortly before the acquisition.
  • by ceoyoyo (59147) on Thursday February 20, 2014 @03:59PM (#46297981)

    I suspect many WhatsApp users have it free. I do. Anyone who used it before they "monetized" doesn't pay. If they change that, or if Facebook starts mucking with it, I'll use something else.

    There are a LOT of free texting programs, and it takes about a weekend to write another one. Extracting sixteen billion dollars from WhatsApp is going to be an exercise in futility. Hopefully the WhatsApp people are laughing their way to the bank (and selling their FB stock as fast as they can).

  • by gurps_npc (621217) on Thursday February 20, 2014 @04:10PM (#46298081) Homepage
    You are missing the fact that the telcos are not smart enough to make txt messaging free. They see it as a money maker, rather than a loss-leader.

    Their entire philosophy is screwed up - charging people for things that should be free (leaving a contract) and giving away stuff that should cost money (smart phones).

    They hope to confuse people and make money off of their stupidity, rather than to offer a simple, clear, fair deal and make money from intelligent choices.

  • Re:(Over valued)^2 (Score:5, Insightful)

    by 140Mandak262Jamuna (970587) on Thursday February 20, 2014 @04:22PM (#46298213) Journal
    Well, I was shooting for +1 funny, so did not rewrite it. But God being kind gave me +1 informative, and I now look silly.
  • by Carewolf (581105) on Thursday February 20, 2014 @04:30PM (#46298281) Homepage

    You are missing the fact that the telcos are not smart enough to make txt messaging free. They see it as a money maker, rather than a loss-leader.
    Their entire philosophy is screwed up - charging people for things that should be free (leaving a contract) and giving away stuff that should cost money (smart phones).

    Their policies DO make sense if you don't think about it.

  • I don't expect that $16.5B worth of facebook stock will be worth much in another couple years.
  • by Solandri (704621) on Thursday February 20, 2014 @04:51PM (#46298465)

    The funny thing is Facebook bought for billions a company which makes software running over XMPP. THAT was pathetic.

    They didn't pay $19 billion for the app. They paid for the userbase. From what I read it's about 450 million, which would make the purchase price about $42 per user. A little steep, but not outlandish in advertising terms. Now they have to figure out how to hang on to those users and grow the user base.

  • by greenfruitsalad (2008354) on Thursday February 20, 2014 @04:52PM (#46298493)

    no, it isn't pathetic. what facebook bought was a large userbase. same goes for microsoft with skype, rakuten with viber, etc.

  • by mveloso (325617) on Thursday February 20, 2014 @04:57PM (#46298565)

    What is privacy these days? The USPS tracks every letter, or at least takes a picture of it (who knows what they do with that). The phone company always knew who you called, but they didn't care. Your mailman sort of knows what mail you got. Your friends, etc know what you like.

    The question isn't about privacy, because that was always an illusion. The question is who do you want to know what?

    Do I want google, and by extension advertisers (or entities in the advertising programs), to know anything about me? Amazon? Apple? My phone company? The government?

    At least in the US, everyone sort of has an advertising profile. Who gets access to it and why? You have no real control over that.

    Sometimes, advertising can be convenient. When you're looking for a car, it'd be nice to get a whole bunch of, say, test drive for dollars coupons.

    Sometimes, it can be bad - like when you get medical condition related ads at home when you didn't want anyone else to know.

    At some point the public needs to have the ability to take control of this information somehow. It's unclear how that's going to happen. Are online footprints considered property rights?

  • by erp_consultant (2614861) on Thursday February 20, 2014 @05:31PM (#46298963)

    From what I understand WhatsApp requires you to use a real phone number (your cellphone number in fact) in order to receive text messages via your data plan rather than the SMS plans that cost extra with many carriers.

    Sure, Facebook has a messaging app but they don't have your phone number. You can give it to them but I suspect that most people either leave it blank or put in a fake number. I suspect that a large part of this deal is getting a hold of that huge phone book that WhatsApp has now. Once FB has your cellphone number they can serve up ads to you via text messages even if you are not logged on to FB. Or maybe they will just sell your number to someone else.

    Just watch - they will bury this 10 layers deep in the service agreement where nobody reads it. Next thing you know you'll be bombarded with junk...all in exchange for "free" text messaging. It's one more reason not to trust Zuck and company.

    I'm not a WhatsApp user but if I were I'd be closing my account and looking for an alternative - pronto.

  • by Bueller_007 (535588) on Friday February 21, 2014 @04:35AM (#46302333)

    To give you an idea of how ridiculously overpriced WhatsApp is (and Facebook as well), here's a selection of major American companies with a market cap less than what Facebook paid for WhatsApp.

    Retail:
    Macy’s
    Gap
    Bed Bath & Beyond
    Tiffany & Co.
    Ralph Lauren
    Staples
    Avon

    Tech:
    LinkedIn
    Netflix
    Xerox
    Nvidia

    Travel:
    Marriott International
    MGM Resorts
    Hertz
    Delta Air Lines
    United Airlines
    American Airlines
    Southwest Airlines

    Food:
    Chipotle
    Hershey’s
    J. M. Smucker
    Campbell Soup
    Tyson Foods
    Dr Pepper Snapple Group
    Monster Beverage
    Molson Coors Brewing

    Other:
    Harley-Davidson
    Mattel
    Whirlpool
    Western Union
    H&R Block
    McGraw-Hill
    News Corp
    The Carlyle Group

Their idea of an offer you can't refuse is an offer... and you'd better not refuse.

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