I have a contrarian view on Facebook's investment in Whatsapp. I think this is an excellent acquisition for Facebook.
The email address was the unique ID to identify anyone for several years now. That's true for only about 1-2 billion people. Now, almost everyone who has an email address (or will have very soon) has a Facebook account as well.
The mobile phone number is the new ID. That will be the unique identification for the next 2 billion people or more.
By any conservative measure, WhatsApp will have 2 billion users in two years. They have executed it so well and it seems very likely that they will reach the 450-million mark very soon. There is a small risk they may not, but that's a risk Zuckerberg is probably willing to take.
So, if you were Zuckerberg and you got 2 billion users' unique IDs for 1/10th of the price of his company, twice the number of users at 1/10th of the price, that's got awesome written all over it.
Why would you not do that?
Facebook has 1 billion plus users and it is valued at $160 billion with a revenue of $6 billion. WhatsApp will have 2 billion users and is worth $16 billion and is breaking even or is already profitable.
This is a no-brainer deal and an absolute steal, in my mind. The future of communication is up for grabs as well.
Email is clearly not the preferred medium for my kids and the younger folks. My kids only use WhatsApp. They also use YouTube as their search engine instead of Google or Bing. These are the big changes being driven by mobile phones.
That's the future. And Zuckerberg now has gotten relatively cheap insurance against being a small player in mobile.
I--The writer is CEO-in-residence, Microsoft Accelerator, a firm that incubates start-ups in India.I