Is Zuckerberg Right on WhatsApp Value for Facebook?

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Feb. 24 (Bloomberg) -- Ali Rosenthal, COO at MessageMe and former mobile executive at Facebook, and Bloomberg Contributing Editor Paul Kedrosky examine the value that WhatsApp brings to Facebook on Bloomberg Television’s “Bloomberg West.”

Billion, but he doesn't know for sure if it's going to be around a year from now?


It is hard to comment on the price because we just don't know at this point.

It is growing at a million users a day.

People are getting onto this service every day am a talking about things they're interested in and chatting with one another.

There is real value to that.

You know more than anyone how difficult it is for an app like this to hit the mainstream and stay there.

I had a guest last week who says he doesn't know what he's going to be using on his phone in five years.

If that's the case, why is it worth it?

It's interesting to look at what was happening when they started.

In 2009, they were the first cross-platform over-the-top messenger to emerge and they own the exhaustion is relationships.

Markets outside the u.s. are growing like crazy and for the past four and a half or five years, they have building, building, building.

It is not going to go away overnight.

The numbers and lines show quite the opposite.

The platform is amazing and the numbers speak for themselves.

What is interesting is not how much business or how many, but what the businesses.

Yes, they are taking money from the carriers, they're just killing the business.

What do you make out when you look at the evaluation and type of metrics facebook must have been thinking about?

Whenever you were hiding in the wilderness last week, we were going at this in terms of looking at the universal gravitational concept of purchasing companies.

This $42 per active user, you can look at another revenue purchase made in the 1990's with microsoft buying hotmail.

We have seen these kinds of numbers for companies at this stage who don't generate revenues and i'm not particularly troubled by that at all.

Looking at the size of their active user base and comparing it to twitter, you can see a lot of opportunities to produce material revenues in very short order depending on what dials they decide to turn.

It is stunning to see a company produce a network of this size and such short order.

Why can't that happen over and over?

Parents join and they say i'm out, that's what makes facebook a bad neighborhood.

That will be a pretty problem for the services, maintaining any sort of persistency.

I think we are going to see a series of acquisitions like this over time.

I want to push back on what paul said.

You were a banker at goldman sachs -- it wasn't even users, it was eyeballs and page views and those were serious the tricks discussed around mergers and acquisitions.

This number of users is silly unless its revenues attached to users and i don't see inning there.

Not to be debbie downer, but i think it's a hard thing to get to.

I'm sure there was no dcf on the analysis.

It is a growth story.

What paul mentioned with respect to twitter is comparable as you start to tm on value, but you raise a good point.

Whether or not facebook ultimately introduces ad products, they said they won't. this has such potential, these are customers using this roddick , this one plays every single day, so there has to be opportunity there.

What about making money?

We have his mission has been to connect the world and that sounds very benevolent but he talked about presenting this plan to his board and said i don't see an immediate way this will be a good is missed, but i have to believe it will be.

In the mid-to long-term, his face book ends up being the underlying network so every time someone connects to the internet or 50% of the time, that is valuable.

Is that possible with the way google and apple control at right now?

It will be very interesting to see how works out for them.

I am hugely skeptical about that stuff.

I find that happy talk rhetoric, i am happy he's doing it but i don't think it has material business consequences and will probably frustrate many investors as they hear how much time and effort -- i like what facebook does more than seeing what they do.

When they talk about what they are doing, i get agitated and think this company is completely mad and then they go out and make these aggressive strategic act positions and say they are prepared to proceed -- to pursue grand management strategies and that could work.

Nevertheless, the outcome is the same.

Given you have in inside facebook, is there a problem with buying versus building innovation?

You have said facebook is more like a media conglomerate that a social network.

Could facebook become so bloated down the line that it becomes like one of these legacy players having problems ike yahoo!

Or cisco?

I haven't been inside facebook -- the way facebook thinks about enabling its talent and letting engineers and product managers and anyone really innovate the hacker culture mark talks about a lot it face significant strategic advantage.

They bought instagram him and they bought whatsapp and they said they are going to leave these strategies loan.

It's an interesting allusion to what is going on but a lot of the success of facebook from the past, present and going forward has to do with a talented the way they treat this people.

Which may be different from other companies out there.

In terms of buying versus welding, sometimes that makes sense.

Innovation happens when you are the big player, that will sometimes happen and you strategically acquire that company before they can significantly compete with you.

What does this mean for you guys?

You have eight million users.

Are you guys going to change your plan?

We are working on a spinoff based on the data we've seen which has a lot to do with some of what i was talking about.

Moving from purely communicating to communicating with and around content and helping people discover things and enable conversations around the things.

We have a product coming out we think will address that.

You are launching something completely new?

We launching something completely news -- something completely new.

Lex thank you both for sharing

This text has been automatically generated. It may not be 100% accurate.


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