mobile-apps, social-networking, valuationWhen looking at the figures of the valuation of the users, I am surprised of the high differences between the valuation of a whatsapp user (roughly 50$) against, say a viber user (roughly 3$, but I am not sure that these valuations took place at the same time).
How come these differences were so high ? These applications seem to gather the same data from the users, after all…
Methinks you’re not aware that you’re comparing apples to oranges. When it comes to acquisitions, the only thing that counts is how big a check the buyer is willing to write. The rest - call it assets, fundamentals, whatever - is nothing short of cosmetic. It matters, of course, but the key is to understand that the same company can have very different valuations depending on the buyer.
In this case, Rakuten is a conglomerate with over 40 business lines. It’s into just about everything online that you can think of: retail, travel agent, bank loans, brokerage, etc. By buying Viber, it’s expanding in yet another business. Presumably, it’s doing so with the aim of using augmented chat as a commercial platform for its other lines of business.
Facebook, in contrast, paid for a company that could have been part of its downfall:
Chat is an essential part of social media platforms. Particularly on mobile, where chat apps are the ones that get opened most. It’s where a lot of future hotness is going to happen. Expect a slew of developments in the coming years on chat-related apps as companies battle to effectively replace SMS. Apple gave a taste of what’s coming in iOS 10.
Facebook’s user base is starting to age. That’s usually not a good sign when you’re a social media portal. When you lose the younger audience, you’re well on your way to becoming the next MySpace. Plus, it had just failed to purchase Snapchat.
Put another way, on the one hand side you’ve a conglomerate that is investing in a new distribution channel for its other business lines, and on the other you’ve a company that is preemptively buying competitors to remain the relevant social media.
When social networking and messaging startups are being evaluated, the most important factors or variables which comes into place are the monthly active users and also the networking effect.
Now, considering the numbers of both Whatsapp and Viber:
Viber : 754 million registered users
Whatsapp : 1000 million monthly active users
Users need to be very active on the product for the company to exploit the networking effect, and whatsapp numbers speaks for itelf.
Networking effect is a very viral and a highly influencing effect in the domain of chat and social networks. So, with such a huge monthly active users numbers, Whatsapp pretty much towers over Viber, whose total registered users number is lesser than Whatsapp’s monthly active users stat.
In addition, Whatsapp is now backed by a company which has the lion share of the market in the social networks domain, which is a very influential backing, and also highly boosts the valuation.
The new oil is data. Valuations (and actual sale) of businesses like LinkedIn for $26.2 bn are because of the data that can be gleaned from the members.
Speaking for WhatsApp which was sold for $19bn you have a large volume of interesting data ... some suggestions, which I link into Facebook data - which they will.
Viper only has 249 million active users, which gives a much poorer connetivity. But then again valuation is about perception.
Here are a list of the larger virtual communities suggesting Facebook has 1.65 billion users and WhatsApp has 1 billion active users. There will be a high degree of overlap in these user groups.
Data is the new oil. Data is all about understanding your market and selling better.
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