News for hackers. Stuff that matters.

A comment on Facebook Buying WhatsApp for $16B in Cash and Stock Plus $3B in RSUs. Parent comment

Re:Facebook Buying WhatsApp for $16B in Cash and Stock Plus ... by pitchups on Wednesday February 19, 2014 @06:09PM (#7267269)
True, the reasons are different. But the motivation is the same : to stay ahead of the competition. In my view, and based on my own experience, Whatsapp is being used as a light-weight social network built around messaging and optimized for mobile phones. In fact, I share a lot more stuff with friends and family on Whatsapp - including pictures/videos/messages - than I do on Facebook.

The more Whatsapp satisifies my sharing needs, the less I use Facebook. And that is a competitive threat to Facebook. Instagram was similar - a light-weight social network built around photo-sharing.

I think Zuckerberg is a deeply strategic thinker trying to avoid the pitfalls of the "Innovator's Dilemma". Both Instagram and Whatsapp are classic examples of what is described in Innovator's Dilemma - light-weight products that can slowly eat into the market share of the incumbent, and ultimately displace it.

Edits : formatting.

[ Parent | on HN ]
Re:Facebook Buying WhatsApp for $16B in Cash and Stock Plus ... by lifeisstillgood on Wednesday February 19, 2014 @06:31PM (#7267429)
yes yes and yes.

But boy - 16 billion.

[ Parent | on HN ]
Re:Facebook Buying WhatsApp for $16B in Cash and Stock Plus ... by jmathai on Wednesday February 19, 2014 @07:42PM (#7267898)
The opportunity cost is much larger if they miss out. It's the difference between ponying up tons of cash to stay relevant or fading into obscurity.
[ Parent | on HN ]
Re:Facebook Buying WhatsApp for $16B in Cash and Stock Plus ... by nousernamesleft on Wednesday February 19, 2014 @07:52PM (#7267956)
But it in no way ensures they stay relevant. It is literally just blindly flailing around buying anything that gets a lot of users out of fear and having no idea how to maintain their position.
[ Parent | on HN ]
Re:Facebook Buying WhatsApp for $16B in Cash and Stock Plus ... by jmathai on Thursday February 20, 2014 @02:36PM (#7273018)
It doesn't ensure they stay relevant but it's a better strategy than watching your target demographic leave your platform.

It's a $19B investment in trying to keep people on Facebook. $20B if paired with Instagram and $24B if they had acquired SnapChat.

The numbers sound crazy but they're trying to hold on to and grow a market cap that's currently $175B.

Zuck has some steel nuts but it's what got him to the $175B number in the first place.

[ Parent | on HN ]
Re:Facebook Buying WhatsApp for $16B in Cash and Stock Plus ... by nousernamesleft on Thursday February 20, 2014 @02:43PM (#7273063)
>It doesn't ensure they stay relevant but it's a better strategy than watching your target demographic leave your platform.

I don't see any evidence to support that claim. It is a different strategy, but I don't see any indication that it is better. Flushing a few billion dollars down the toilet is a different strategy too, but that doesn't make it better.

[ Parent | on HN ]