Google (GOOG) Suggests Facebook Overpaid for WhatsApp
Source: Ron Haruni
According to a Wall Street Journal report that references sources familiar with Google (GOOG), before Facebook (FB) paid $19 billion last month for text-messaging service WhatsApp, Google considered it.
At the Morgan Stanley (MS) Technology, Media & Telecom Conference in San Francisco, analyst Scott Devitt asked Google’s Chief Business Officer Nikesh Arora how Android, the world’s most popular mobile platform with nearly 80% of smartphone market in 2013, might generate revenue other than through ads and sharing revs from apps.
Arora asked Devitt for suggestions. The analyst mentioned mobile messaging apps which have been gaining attention lately for providing consumers with a new way to communicate and which are especially popular in Asia.
Arora’s response 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 paid a reported price equaling $345 million per employee.
The report also said that Google offered 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 the search giant is focusing on improving the Android user experience, rather than worrying about new ways to make money from the platform.
Google shares are up $4.72, or 0.39%, at $1,222.98 in pre-market trading.
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