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JagPot Deal: Facebook bought WhatsApp for 1 JagPot (1 Jagan Jackpot=1 Lakh Crores) http://www.firstbiz.com/corporate/450-32-1-0-4-numbers-expla in-facebook-paying-19-bn-whatsapp-77016.html 450, 32, 1 and 0: These 4 numbers explain why Facebook is paying $19 bn for Whatsapp With a daily messaging volume range of 20 billion, Whatsapp's volume growth is what made Facebook founder Mark Zuckerberg shell out a jaw-dropping $19 billion for the instant messaging service. An estimated 450 million people use WhatsApp each month, with 70 percent of those using it on any given day. To give this number some perspective, it is even larger than Twitter's user base. But with a $1 subscription model per user per year, why would Facebook spend so much on something not earning much money? Zuckerberg has said the two companies will remain independent for now. APZuckerberg has said the two companies will remain independent for now. AP WhatsApp has never raised much outside funding, except from one lucky VC firm: Sequoia Capital. And now Jim Goetz, on behalf of Sequoia, the sole investor in $16 billion WhatsApp, explains the Facebook deal in four simple points: 450 (million): That's how many active users WhatsApp has and according to Goetz it reached that number faster than any other company in history. Reportedly, more than 1 million people install the app every day. "Incredibly, the number of daily active users of WhatsApp (compared to those who log in every month) has climbed to 72%. In contrast the industry standard is between 10% and 20%, and only a handful of companies top 50%," says Goetz in this blog post. 32. With only 32 engineers, that means that there is only one WhatsApp engineer for every 14 million active users. Goetz says this ratio is unheard of in the industry. "This L E G E N D A R Y crew has built a reliable, low-latency service that processes 50 billion messages every day across seven platforms using Erlang, an unusual but particularly well-suited choice. All that, while maintaining greater than 99.9% uptime, so users can rely on WhatsApp the way they depend on a dial-tone." 1. That's the number of dollars users pay per year after Whatsapp's first trial year of using the service, with no SMS messaging charges. This can save users trapped in expensive data plans up to $150 per year, says Goetz. According to Goetz,engineers didn’t spend time on monetizing schemes, because all users just pay a dollar a year. They didn’t spend time developing new ad products, games, and analytics. And cutting out ads freed up a particularly significant chunk of time. "It’s easy to take this novel model for granted. When we first partnered with WhatsApp in January 2011, it had more than a dozen direct competitors, and all were supported by advertising. (In Botswana alone there were 16 social messaging apps). Jan and Brian ignored conventional wisdom. Rather than target users with ads — an approach they had grown to dislike during their time at Yahoo — they chose the opposite tack and charged a dollar for a product that is based on knowing as little about you as possible. Facebook has assured Jan and Brian that WhatsApp will remain ad free and they will not have to compromise on their principles. We know that Jan, as a new member of Facebook’s board, will continue to champion the rights of WhatsApp users," adds Goetz. 0. That's the money WhatsApp invested in marketing. "Unlike their smaller competitors, it hasn’t spent anything on user acquisition. The company doesn’t even employ a marketer or PR person. Yet like the world’s greatest brands, it’s created a strong emotional connection with consumers. |
