Facebook $22 billion WhatsApp deal buys $10 million in sales

-
 The numbers are in for Facebook Inc.’s acquisition of mobile-messaging application WhatsApp Inc.: The social network paid $22 billion for a startup that generated $10.2 million in revenue last year.
In a regulatory filing yesterday, Facebook disclosed WhatsApp’s financial results for 2012 and 2013. The messaging service, which reached 400 million active users in December, generated less than 3 cents in revenue for each one last year. By comparison, Facebook paid $55 per user when it acquired the company. WhatsApp’s net loss was $138.1 million for 2013.
The valuation of the deal was already regarded as lofty, at 19 times projected sales. Still, the results illustrate how far Facebook has to go to get its money’s worth for the app, which generates revenue by charging 99 cents for subscriptions after a user’s first year. Chief Executive Officer Mark Zuckerberg said he’s in no rush to make money from WhatsApp, or Facebook’s other growing applications, until they reach 1 billion users.
“The right strategy is to focus on connecting the people before aggressively turning them into businesses,” he said yesterday on a conference call to discuss Facebook’s third- quarter earnings. “Once we get to that scale, then we think they will start to become meaningful businesses in their own right.”
WhatsApp’s revenue growth is going in the right direction - - sales more than doubled last year from $3.82 million in 2012. The app now has more than half a billion users, and revenue for the first half of this year reached $15.3 million, Facebook said yesterday.
The unit’s losses are still widening -- its net loss for the six months that ended in June was $232.5 million.
Chatting App
Facebook already had a product for chatting, Messenger, when it acquired WhatsApp. Zuckerberg said that the purpose for Facebook’s Messenger is different than for WhatsApp. People use Messenger to communicate with their Facebook friends, while WhatsApp is more of a text-messaging replacement that people might use with those who aren’t their friends on social media. The two products are seeing growth in some of the same countries, he said.
The world’s largest social network paid for WhatsApp mostly with equity, boosted by a rise in its stock price. Those who praised the acquisition said Facebook was knocking out a major competitor by bringing it into the company.
“For the next few years our focus is going to continue to be on growth,” Jan Koum, WhatsApp’s CEO, said yesterday at Re/code’s mobile conference in Half Moon Bay, California. “We’re going to focus on growth and not do any kind of experimentation with monetization today.”

 by Sarah Frier

Comments

Post a Comment

Message Sent

Popular posts from this blog

Meet the world's hottest transgender - Amiyah Scott

-
Image
Yep, all that used to be male. Her name is Amiyah Scott, but she was born ‘Arthur Scott’ in New York in 1988. She's a transgender model and make-up artist. Arthur started the process of turning into a woman when he was 17. He got breast augmentation, booty shots, light filler in the cheeks etc etc.  by linda ikeji       
Read more

Man shot dead by police officer who tried to jump fuel queue in Lagos; police identifies officer responsible

-
Image
  A police officer has gunned down a Lagos resident who prevented him from jumping the queue to buy fuel at a Nigerian National Petroleum Company Limited (NNPCL) filling station at Obalende in the Ikoyi area of Lagos State.    Toheeb Eniafe was in the queue to get petrol on Wednesday evening, May 1, when two men, said to be police officers, attempted to drive into the station to buy petrol even though they were not in the queue to get the product.  This attempt by the police officers to jump the queue was met with stiff resistance from people in the queue who had been waiting for hours.   Eniafe was at the forefront of the resistance, telling the men to join the queue like everyone else.   This degenerated into a physical fight and one of the men shot Eniafe before fleeing the scene.  An angry mob was said to have chased and caught up with one of the officers but he later escaped after firing shots in the air.  On Thursday, May 2, the Lagos State Police Public Relations Officer, SP Ben
Read more

Ugandan President Museveni claims IMF, World Bank and Western countries purposely keep African countries in perpetual poverty (video)

-
Image
President Yoweri Museveni of Uganda has claimed that the West and various international monetary lenders keep Africa in continuous poverty. Speaking at the World Bank’s International Development Association summit for African Heads of state, held in Nairobi, Kenya, Museveni took a bold swipe at world leaders saying that most of Africa’s problems predicted over 60 years ago were a result of philosophical, ideological, and strategic economic mistakes. He claimed that a fundamental African problem is that aid from the World Bank and other Western bodies was majorly for profiteering. “The crisis which is in Africa today is because of philosophical, ideological, and strategic economic mistakes which we have been talking about since the 1960s. It is not an accident when you see the crisis in many African countries, the collapse of States. We predicted this in the 1960s – philosophical, ideological, and strategic mistakes. I don’t have time to amplify each one but I was very happy to hear the
Read more