The biggest tech story of last week unquestionably was Facebook’s acquisition of WhatsApp for $19 billion. That astounding figure is six times more than the $3 billion that Snapchat turned down. They spent $340 million for every WhatsApp employee.
So why exactly do you think Facebook paid megabucks for this acquisition? It certainly isn’t for the revenue potential. WhatsApp charges its 450 million users $1 annually to use the service. We aren’t math geniuses, but that’s an estimated $450 million in annual revenue. Facebook has promised not to insert ads into the service to squeeze more money out of it. So, even if the service continues to grow, it’s going to take many years to even get close to the $19 billion they paid for it.
Which leads us to the next question. What does Facebook consider more valuable than pure revenue? Data! More specifically, they want your data. They bought WhatsApp because it gives Facebook access to a wealth of user data, opening up both mining opportunities, and possible privacy concerns.
Some people are already bailing on WhatsApp. Are you a WhatsApp user? Will you stick with the service? Let us know in the comments section below.