Petaling Jaya, Feb 26- I was struggling with my tabla lesson, something I should have picked up years ago. My master, in his late-20s from the Indian state of Punjab, saw my predicament “If you forget, I’ll Whatsapp you [the steps],” he said.
Now, that’s another practical use for WhatsApp. The tabla beat stopped at the mention of WhatsApp. For the last few days, my thoughts have been consumed by Facebook Inc’s acquisition of WhatsApp Inc.
How did they value the cross platform mobile messaging company?
On Feb 19, Facebook announced its “definitive agreement” to acquire WhatsApp for a total US$19 billion (RM62.41 billion). That’s cash US$4 billion and US$12 billion in shares. On top of that, WhatsApp’s founders and employees will get US$3 billion in restricted Facebook stock over four years. Now, that’s a huge, tidy sum.
It’s close to a quarter of Malaysia’s federal government annual budget for this year.
It’s an awesome milestone for a company that began just five years ago, an amazing feat for a company with a mere 55 employees.
In that short space, they attracted some 450 million users, with a claimed one million new sign ups every day. And that’s without any advertising.
WhatsApp’s messaging volume is approaching the entire global short messaging service (SMS) telecom volume, with 19 billion sent and 34 billion received per day, according to information released in the course of the deal. It seems like a real threat to mobile phone operators. One wonders how much of the SMS revenue share have the local operators lost to the free messaging provided by WhatsApp and its like.
Is the valuation off the roof? Are we looking at yet another sign of the onset of Bubble 2.0? Will this go the way of, say, Geocities? Before Bubble 1.0, there was a mad rush for tech-related outfits.
Yahoo! Inc, for example, paid US$3.6 billion for a websitemaking company, then the third most visited website. If you visit Yahoo’s website today, you will see the remains of the deal. It says: “Sorry, GeoCities has closed…The GeoCities service is no longer available, but there’s a lot more to explore on Yahoo!”
Our own tech-wizard entrepreneur thinks otherwise. “I expected it to happen. WhatsApp has been growing at such a fast pace,” said MOL Global Pte Ltd group CEO Ganesh Kumar Bangah. “If not now, they may have to pay much more later, or they may never be able to buy it anymore.”
Ganesh himself was at the centre of Malaysia’s latest excitement on the technology front. On the same day Facebook announced its move, MOL Global announced that the Johor Sultan was taking a 15% stake in its wholly owned operating subsidiary MOL AccessPortal Sdn Bhd. Sultan Ibrahim Ismail Sultan Iskandar is paying RM396 million for the stake in the company privately- held by tycoon Vincent Tan Chee Yioun.
WhatsApp may go the way of YouTube. In October 2006, Google Inc paid US$1.65 billion in all-stock deal for YouTube Inc. Many were then awed with the price tag for the less than two years old company. Today, it may be deemed a cheap entry into the world’s No 1 video website.
As I go through this week, I may visit YouTube to check out some tabla moves. Otherwise, no worries, my Master Ji will WhatsApp me the beat.
Habhajan Singh is the executive editor of The Malaysian Reserve. Feedback:hab@ themalaysianreserve.com
-FreeMalaysiaToday
