Reuters - Video

EDITION: U.S. | U.K. | IN

Tech Videos

What's up with WhatsApp Facebook deal?

Thursday, Feb 20, 2014 - 02:04

Feb. 20 - Facebook's $19 billion deal to buy WhatsApp will place it closer to the heart of mobile communications. But as Sonia Legg reports some think the world's largest social network is paying a high price to bring younger users into the fold.

▲ Hide Transcript

View Transcript

It may be the world's fastest-growing mobile messaging startup, but is WhatsApp really worth $19 billion? The company only employs 55 people and Facebook is effectively paying $42 dollars for every WhatsApp customer. In pure monetary terms it's probably not worth it, says IG's Brenda Kellly. (SOUNDBITE) (English): BRENDA KELLY, MARKET ANALYST, IG, SAYING: "When you look at it in respect of what was offered for Snapchat which was a mere $3 billion it does seem a little over the offer price." The deal dwarves the $1 billion Facebook paid for photo-sharing app Instagram. But that's not the only reason Mark Zuckerberg wants WhatsApp. (SOUNDBITE) (English): BRENDA KELLY, MARKET ANALYST, IG, SAYING: "When you look at how much growth WhatsApp has managed to achieve over the last number of years from about 200m users to 450m users which is way more than the likes of Twitter I think it is a way for Facebook to engage the younger market it has been losing favour with over recent quarters." WhatsApp was founded by Jan Koum - a Ukrainian immigrant who dropped out of college. It went from zero to 450 million users in five years and now adds a million new customers every day. It leads the new wave of smartphone-based messaging apps. But Peter Thal Larson from Reuters BreakingViews says it's a fickle market. (SOUNDBITE) (English): PETER THAL LARSON, ASIA EDITOR, REUTERS BREAKINGVIEWS, SAYING: "That's the problem with these messaging apps - they are the hot thing, they have grown very quickly and people are wondering if maybe they can use this to maybe push ecommerce or maybe knit our other services together. But the questions is, how do you make money out of this and also what's to guarantee that people won't just switch onto some other messaging app when something else comes along." The deal involves $4 billion in cash and $15 billion in stock. That's more than Facebook raised from its own IPO and underscores the social network's determination to win the market for messaging. Zuckerberg says it will continue operating independently and he will keep WhatsApp's no ad policy. But how the service will pay for itself going forward isn't yet clear.

What's up with WhatsApp Facebook deal?

Thursday, Feb 20, 2014 - 02:04

Top News »

Money »

Finding meaning in the S&P 500 2000 mark Finding meaning in the S&P 500 2000 mark

Mon, Aug 25, 2014 - (2:35)

S&P falls back from record high S&P falls back from record high

Fri, Aug 22, 2014 - (1:35)

S&P 500 closes at new high S&P 500 closes at new high

Thu, Aug 21, 2014 - (1:24)

S&P 500 just shy of record S&P 500 just shy of record

Wed, Aug 20, 2014 - (2:23)

Apple hits $100 a share Apple hits $100 a share

Tue, Aug 19, 2014 - (2:06)

Nasdaq closes at 14-year high Nasdaq closes at 14-year high

Mon, Aug 18, 2014 - (2:23)

Putin puts Wall Street in buying mood Putin puts Wall Street in buying mood

Thu, Aug 14, 2014 - (2:10)

We've become a promotional culture-RetailMeNot's Bodge We've become a promotional...

Thu, Aug 14, 2014 - (4:39)

Dow back to positive territory for year Dow back to positive territory for year

Wed, Aug 13, 2014 - (2:18)

The Exchange »

The Exchange: Hot commodity The Exchange: Hot commodity

Wed, Jul 16, 2014 - (9:25)

The Exchange: Constitutional crusade The Exchange: Constitutional crusade

Wed, Jun 25, 2014 - (11:35)

The Exchange: The value of money The Exchange: The value of money

Mon, Jun 02, 2014 - (9:53)

The Exchange: China’s Second Continent The Exchange: China’s Second Continent

Tue, May 27, 2014 - (9:35)

The Exchange: A master of business arts The Exchange: A master of business arts

Thu, May 08, 2014 - (8:24)

The Exchange: America's bankrupt cities The Exchange: America's bankrupt cities

Mon, May 05, 2014 - (8:52)

The Exchange: Let the rocking commence The Exchange: Let the rocking commence

Tue, Apr 08, 2014 - (8:13)

The Exchange: The Moneyball fallacies The Exchange: The Moneyball fallacies

Mon, Mar 24, 2014 - (9:54)

Is doing good a good business? Is doing good a good business?

Mon, Mar 17, 2014 - (7:38)

Reuters Investigates »

Re-homing victim: "I could have been dead" Re-homing victim: "I could have been dead"

Wed, Feb 19, 2014 - (8:24)

Cops and loggers in the Amazon rainforest Cops and loggers in the Amazon rainforest

Fri, Jan 10, 2014 - (4:01)

"Passed around like a dog" "Passed around like a dog"

Thu, Aug 29, 2013 - (6:32)

Adopted, then abandoned online Adopted, then abandoned online

Thu, Aug 29, 2013 - (13:21)

How the DEA keeps its secrets secret How the DEA keeps its secrets secret

Mon, Aug 05, 2013 - (1:36)

How education lost its role as the great equalizer - Reuters Investigates How education lost its role as the great...

Mon, Dec 17, 2012 - (7:52)

Jihad Jane: From abused child to American jihadist - Reuters Investigates Jihad Jane: From abused child to American...

Sat, Dec 08, 2012 - (10:01)

Jihad Jane: The order to kill - Reuters Investigates Jihad Jane: The order to kill - Reuters...

Sun, Dec 09, 2012 - (10:39)

Moving Pictures »

Mending dolls, teddies and hearts Mending dolls, teddies and hearts

Fri, Aug 22, 2014 - (3:12)

"Old timers" sail the Chesapeake Bay "Old timers" sail the Chesapeake Bay

Mon, Aug 11, 2014 - (2:27)

Burned memories Burned memories

Fri, Aug 08, 2014 - (3:02)

Images of July Images of July

Thu, Jul 31, 2014 - (1:20)

World Cup: passion on the pitch World Cup: passion on the pitch

Fri, Jul 11, 2014 - (1:00)

A refugee in America gives back A refugee in America gives back

Wed, Jul 02, 2014 - (3:25)

A long search for refuge A long search for refuge

Fri, Jun 20, 2014 - (3:04)

World Cup: Around the globe in 50 goals World Cup: Around the globe in 50 goals

Fri, Jun 06, 2014 - (1:08)

VIVID – Sydney’s spectacle of light VIVID – Sydney’s spectacle of light

Fri, May 30, 2014 - (1:37)