Google Exec on WhatsApp Deal: $500 Million Per Employee?!

Mar 5, 2014

Google Exec on WhatsApp Deal: $500 Million Per Employee?!

Alistair Barr and ROLFE WINKLER

GoogleGOOG +0.63% was flirting with WhatsApp before FacebookFB -0.27%swooped in and bought the text-messaging service for $19 billion last month. Wednesday, a top Google executive suggested Facebook overpaid.

At the Morgan StanleyMS +0.59%technology conference in San Francisco, analyst Scott Devitt asked Google Chief Business Officer Nikesh Arora how Google might generate revenue from its Android mobile operating system other than through advertising and sharing revenue from apps.

Arora asked Devitt for suggestions. The analyst mentioned mobile messaging apps, which are especially popular in Asia.

Arora was skeptical. “$500 million per employee? Is that a good use of our money?” Arora said. “Are you recommending we buy some Asian messaging service?”

WhatsApp has 55 employees, meaning Facebook’s acquisition works out to $345 million per employee. A Facebook spokesman declined to comment.

Google reached out to buy WhatsApp several years ago, according to two people familiar with the situation, while two other people said deal talks between the two companies also took place more recently.

On Wednesday, Arora said Google is focusing on improving the Android user experience, rather than worrying about new ways to make money from the operating system.

The company’s mobile app store, called Google Play, mobile search ads, YouTube and Google’s own apps will provide more opportunities to make money from Android, Arora added.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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