What’s The Most Expensive (Per User) Acquisition? Hint: Not WhatsApp

WhatsApp logoLast week when Facebook made its jaw-dropping $19 billion announcement that it was buying messenger WhatsApp many people, including me, marveled at the astonishing figure. But almost immediately others said, “Facebook got a deal; WhatsApp was actually cheap.”

I certainly wouldn’t go that far but by some measures WhatsApp (even at $19 billion) is not the most expensive startup acquisition in memory. If one considers the price per user, WhatsApp does emerge as a relative bargain.

This morning, I was pointed to a chart, based on public/third party data, created by Brightside that compares acquisitions on a per-user valuation. This is one of several such comparisons I’ve seen in the wake of the WhatsApp announcement.

The chart is too large to fully include but below, I’ve captured a few of the more prominent acquisitions and their per-user prices:

  1. GeoCities (by Yahoo): $830.23
  2. Aardvark (by Google) $555.56
  3. Mapquest (by AOL): $297.30
  4. Jaiku (by Google): $240
  5. Feedburner (by Google): $232.56
  6. Zappos (by Amazon): $206.22
  7. Delicious (by Yahoo): $150
  8. Flickr (by Yahoo): $111.11
  9. WhatsApp (by Facebook): $35.56
  10. Instagram (by Facebook): $28.57

What’s interesting about the list above is that many of the services are shuttered, suggesting that the acquisitions and their high per-user costs may have been wasted. Indeed, the now-defunct GeoCities property was the most expensive according to the data reflected on the Brightside graphic.

What’s your reaction? Do you believe that WhatsApp is a bargain on a per-user basis vs. the others, and is that the right metric to evaluate the deal?

Related Topics: Channel: Industry | Facebook: Business Issues | Facebook: Mobile | Statistics: Popularity & Usage | Top News


About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • clarklab

    This list is desperately lacking Simple, which cleared almost $1,200 per user…

  • Chahk Noir

    Wow… GeoCities had users?

  • http://www.keshkesh.com/ Takeshi Young

    I’m still sad that Yahoo closed down Geocities. That’s where I first learned to code.

  • rmonitor

    Not a finance guy but maybe Its not such an easy calculation.

    Now we have the cost per user that too a one time cost, how about revenue per user after acquisition. As an example, Amazon got some of the Zappos users buying and giving $5-10 in profit + all new users after the acquisition based on Zappos brand are free (almost), taking the cost per user down over time. So, not so expensive in the long term.

    Won’t be surprised if now actual cost is no cost, only profit for Amazon. Maybe a good finance person can help get a better perspective.

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