All this shows to me is how useless it is to compare by "cost per user". The note at the bottom says "Facebook acquired WhatsApp for 16 billion dollars, the largest startup acquisition to date. Cost per user was comparable to Google's YouTube acquisition.".
It's sort of close, but we're still talking about a swing of >30% there -- $5 billion dollars in WhatsApp's case.
There are many things missing from "cost per user" but I think the first thing to ask is "user doing what"?
Yup. "Cost per user" strikes me as a very '90s metric, for lack of a better way to put it. It is an unfocused average. It presumes that the singular purpose of any acquisition is user count. This makes especially little sense in certain cases, i.e., the Facebook/WhatsApp acquisition, wherein a large proportion of the WA users are likely to be duplicative with FB users.
"User doing what?" is a decent start. But of course, we have a host of other considerations to ponder: technology, platform, integrations, competitive blocking and tackling, etc.
FWIW, I still can't wholly grok the WA purchase price. The price seems largely to have been driven by competitive bidding between FB and Google. Also a healthy sprinkling of defensiveness and fear, mixed with a dollop of "because we can." Factor in some "we believe our stock is overvalued, and as such, we will realize a discount on price correction," and I suppose you arrive at a figure that will end up south of FB's nominal purchase price. The one thing I can say is that Instagram looks likes a ridiculous bargain in retrospect, and especially in comparison.
That said, to whatever extent we do want to talk about user counts, it's worth noting some history. Around the time Facebook had an estimated $15 billion valuation, on the heels of Microsoft's advertising partnership/investment in 2007, Facebook had about 50 million active users. WhatsApp has 465M+. Apples and oranges, to some extent. But still. Worth considering.
How many were they at YouTube when they got bought?
I tend to think more about acquisitions as capital per employee, as in, that's how efficient they are at creating value. It's more interesting that comparing users because of the "users doing what" question. I'm disappointed i can't find graphs about those. Last companies I checked (but I can't remember which ones), the capital was around $1m per employee. Except for WhatsApp.
Best acquisition? When was the last time you gave Youtube money (or Google money to watch videos)? The fact that their videos are no unwatchable because of quality stutters and the inability to rewind/jump, it's only a matter of time for a new video site to take over.
It's your right to complain about Youtube quality these days (from what I understand ISPs tend to throttle them mercilessly), but it was clearly an extremely good buy for Google, and Google makes tons of money off of Youtube ads.
When was the last time you paid Google for search results? Meh, can't be making that much money.
Are you kidding? After becoming a household brand by trojan tactics (starting with no ads), and then slowly boiling its users until almost every click leads to an ad with delayed skip, and the videos are covered by six layers of distracting banners and useless information?
If our patience is worth any money, Youtube is extracting it in spades now.
Agreed - how do we know the value difference for a "user" of Zappos and a user of whatsapp (among other dimensions)? This graph is not very insightful, it's just visualizing the easy way to look at and quantify the purchase.
It's sort of close, but we're still talking about a swing of >30% there -- $5 billion dollars in WhatsApp's case.
There are many things missing from "cost per user" but I think the first thing to ask is "user doing what"?