[Binu Thomas]

Interesting thread guys.. Here’s my take on this. Facebook / any social network is measured by the number of users and how long they stay on the site. More the merrier. They realized that their user base is more but time spent is not what they want it to be. Meanwhile, WhatsApp was taking this “social media” world by storm. Facebook introduced their own version of messaging, which didnt work at that time and was no competition to WhatsApp. Also, users can share photos and videos on whatsapp to a select group more easily compared to FB.

If you can’t fight them, join them – or in this case, buy them. By buying WhatsApp, they ensured a lot of things –

– Their user base increased significantly (which also helps them justify the valuation, as Abhirup explained)

– They became the leader in messaging market

– They ensured WhatsApp doesn’t go to Google (I think Google was also interested)

Also, we are considering what WhatsApp is doing currently. Think of the future possibilities. Just a thought – can we share money using WhatsApp in the future? Imagine WhatsApp having a wallet option which can help the user share money instantly with their friends. Or they can integrate with some of the existing wallet providers / network providers in select markets. With RBI working towards easing the norms for non banking institutions, India can also be one of the benefactors. This is just one possibility. Using WhatsApp data, FB can predict what each user is interested in and show relevant ads on their FB profile.

Although, today it seems to be highly overpriced deal, this may well turn out be the biggest bargain in the long run if FB uses WhatsApp properly..

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