It's so ridiculous that it's mind-boggling.
Who inside FB actually came up with such a valuation when Rakuten can buy Viber for just USD900mio?
Even with if only USD4B is in cash and the rest in FB stock, it still hardly makes sense.
Let's look at some of the reasons why its a joke:
1) So Many Alternatives
Viber, Skype, Line, Telegram, WeChat, KakaoTalk...the list just goes on. And each one has got features that differentiate itself, though hardly. So what makes WhatsApp that much different?
2) 400mio Subscribers So What?
With so many alternatives, 400mio is not that big a deal anymore. Many users user several messenger apps on their phones. With FB taking over, more subscribers may leave than flow in.
3) New Charging Schedule?
Obviously whoever decided to buy WhatsApp up there in Facebook HQ thought that charging would easily recoup the money. So how does $1.99 a year sound? Not so bad you say? Tell that to the billions of users who will switch to a free messenger.
4) In Need Of Something Revolutionary
In order to keep subscribers active, something very revolutionary will need to be added to the existing offering of WhatsApp. Have FB already given this much thought? I sure hope so. How much different can a messenger app be?
5) Telcos Want Some Pie
Recently the CEO of Singtel signalled an intent to charge either WhatsApp or its users the use of its network. Well the telcos won't let the messengers eat up its lost revenue (does anyone SMS anymore) with doing anything would they? Get ready of Battle Royale!
Personally, I think its a good idea to short FB stock now.
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