Why Facebook paid $19 billion for WhatsApp

Facebook and WhatsApp logos are displayed on portable electronic devices
Facebook and WhatsApp logos are displayed on portable electronic devices.
Credit: Getty Images

Facebook has paid $19 billion for WhatsApp, the smartphone app that allows users to send text messages for free. How can an app be worth as much as Honduras’ entire economy, and much more than the economies of Jamaica and Nicaragua?

Metro spoke with Bryce Keane, founder and director of the London social media firm Albion Drive and co-founder of events firm 3beards.

Isn’t $19 billion too much money for a company that doesn’t make any money?

Let’s be honest, it’s a pretty crazy evaluation. Facebook already has a similar technology but not many users, whereas WhatsApp has 450 million users. Facebook is buying WhatsApp’s users and space.

But how is Facebook going make the money back?

It’s not buying WhatsApp to make money, but to enter a new market and capture an active user population that doesn’t use Facebook. A lot of young people use WhatsApp because they can’t afford text messages. And let’s be honest, somebody else already bought Skype and Viber. The messaging war is on.

Young people don’t use Facebook anymore so it’s trying to get them back…

This is a market that’s using the Internet in a different way. Whatsapp users browse Facebook for 10 minutes at night, but they don’t use it to message their friends on the go. That’s how they use Whatsapp.

Which young hot startup will be the next big acquisition?

Mind Candy, the company behind Moshi Monsters (characters popular among young girls), is one candidate.


News
Entertainment
Sports
Lifestyle
National

Florida man charged with murdering son to play…

A Florida man annoyed that his 16-month-old crying son was preventing him from playing video games suffocated the toddler, police said on Friday.

International

Powerful 7.2 magnitude earthquake rattles Mexico

A powerful earthquake struck Mexico Friday, shaking buildings and sending people running into the street, although there were no reports of major damage.

News

OMG! Exercise can make skin (and butt) look…

A moderate exercise regime can turn back time and actually reverse the skin's aging process, according to new research. The study showed that a minimum…

Local

Oval oasis: Summer of fun kicks off this…

A bold partnership between the Fairmount Park Conservancy and the city's Parks and Recreation Department is kicking off this weekend with family activities re-activating this unused public space.

Entertainment

Whoopi Goldberg makes her debut as marijuana columnist

"It helps my head stop hurting, and with glaucoma your eyes ache, and she takes the ache out. It's wonderful," she said.

The Word

Kate Middleton made fun of Prince William's bald…

Kate Middleton and Prince William are in Sydney, Australia, right now, and it sounds like that brash Aussie sense of humor might be rubbing off.

The Word

Is Tom Cruise dating Laura Prepon?

"Mission: Impossible" star Cruise is said to be dating Laura Prepon, star of "Orange is the New Black."

Television

'Scandal' recap: Season 3, Episode 18, 'The Price…

Sally is Jesus, Olivia caused global warming, and Mellie's still drunk. Let's recap the Scandal finale. A church full of Washington insiders is about to…

MLB

Jimmy Rollins is key to Phillies success

When John Kruk was asked about what the Phillies need to contend for a playoff berth, the ESPN analyst said Jimmy Rollins needs to play like a MVP again.

MLB

Ben Revere lifts Phillies to avoid sweep

Ben Revere came through with a two-out RBI single against Atlanta’s tough lefthander Alex Wood.

NBA

Season wrap: 76ers make the grade

The 76ers opened the 2013-14 season with a victory over the Miami Heat. The Sixers closed the season with a win at Miami.

NBA

Fantasy basketball: Finding next year's NBA studs

Before we put the 2013-14 fantasy basketball season to bed, it’s worth thinking about next year’s breakouts while they’re fresh in our mind.

Tech

VIDEO: 'Vein-scanning' may become the future of paying

Designed to make transactions quicker and easier, the technology works by scanning the unique vein patterns in each person's palm.

Tech

#FollowFriday: 10 of the smartest Twitter accounts

Spending lots of time on Twitter? You might as well learn something. Here are some of the smartest accounts to follow.

Style

Light-up nail art syncs with phone

This Japanese technology syncs light-up nail art with your phone.

Wellbeing

Why is dance cardio taking off in NYC?

Instructors at some of the city's hottest classes explain why.