Belfast Telegraph

Saturday 23 August 2014

Facebook founder Mark Zuckerberg may flounder with WhatsApp valuation

Mark Zuckerberg, founder of Facebook
Mark Zuckerberg, founder of Facebook

Seriously Mark Zuckerberg, WhatsApp with you and your tail-on-the-donkey valuations? Have you not got the message?

Apparently, the Facebook founder was sent the message saying sky-high tech valuations could be leading to another bubble in the sector, the like of which hasn't been seen since the late '90s; but hasn't read it, or doesn't want to take notice of it.

He paid a whopping £19bn for messaging service WhatsApp, a company this reporter has come across only because his nieces told him about it.

The deal wasn't just at a jaw-dropping number at the top line, but is even more shocking when it's broken down.

WhatsApp has 450m users, which means Facebook is paying $36 (£22) for each one, a number which sounds fairly expensive to the untrained-tech-valuing ear. Has Zuckerberg made a bigger error than his stumbling listing of the social media company? Perhaps not.

Firstly, the stock markets, according to the Wall Street Journal, value Twitter, LinkedIn and indeed Facebook's users at around $130 (£78), over three times that of the messaging service. And users log in to the service more often than any of the other sites, not to mention the fact it employs only 32 people and does no marketing.

But despite all the positives, one factor makes me worry for old Sparky Z. My niece – who is known as tech-savvy in a technically challenged family – said WhatsApp is "sooooo five minutes ago. It's all about Snapchat (a photo messaging start-up) these days".

You have been warned Mr Zuckerberg, you have been warned.

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