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posted by
LaminatorX
on Saturday February 22 2014, @12:00AM
from the It's-like-a-telegram-but-on-a-phone dept.
from the It's-like-a-telegram-but-on-a-phone dept.
siliconwafer writes:
"Facebook's purchase of WhatsApp has generated a lot of noise in the financial and tech industries, with some calling the purchase price 'down-right silly' and 'jaw-dropping', and others have said the price is fair, but question the strategy. Is the purchase price evidence that we're entering entering another tech bubble reminiscent of the 1990s? Some say no, while others believe that a bubble may exist only in social media, given that the Global X Social Media Index ETF has outperformed the NASDAQ over the past year."
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Have we entered another tech bubble?
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(Score: 1) by TheloniousToady on Saturday February 22 2014, @10:39AM
Good points. Thanks for linking the Slate article, which I read all the way through. However, here's a slightly different take on Zuckerberg's possible thinking.
What if, instead of dollars, you count your personal "wealth" in terms of users? You're already the wealthiest man on the planet in those terms, but you want more. You already have more dollars than you need, which you don't much care about anyway. (I remember reading that Zuckerberg leads a modest lifestyle - how much can you spend on hoodies anyway?) Therefore, it would be entirely logical to trade dollars for users, even at an exchange rate that doesn't make sense in terms of the normal business calculation of present dollars spent versus future dollars gained. Since you have complete control over Facebook, you don't have to answer to pesky shareholders who might be more interested in future dollars than future users.
In this framework, the fact that Zuckerberg would only get $0.28 for every dollar returned to shareholders is irrelevant. After all, it's the number of users that counts.