Last 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:
- GeoCities (by Yahoo): $830.23
- Aardvark (by Google) $555.56
- Mapquest (by AOL): $297.30
- Jaiku (by Google): $240
- Feedburner (by Google): $232.56
- Zappos (by Amazon): $206.22
- Delicious (by Yahoo): $150
- Flickr (by Yahoo): $111.11
- WhatsApp (by Facebook): $35.56
- 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?