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Facebook-WhatsApp Deal: Smart Move or Just Plain Stupid?

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There has been another huge purchase by social media site Facebook. It is buying WhatsApp, the fast-growing instant messaging service.

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Facebook Chief Executive Mark Zuckerberg, who is paying $19 billion (13.8 billion euros), praised the speed at which his new acquisition has grown: “No one in the history of the world has ever done something like this.”

In the five years since it was set up, WhatsApp has amassed over 450 million users, adding an average of one million daily.

It handles 50 billion messages every day – and growing – even as the number of SMS texts that are sent is declining.
Eighteen billion of those are outgoing messages, many to multiple WhatsApp recipients. As with other messaging services, users can send photos, videos, and audio messages.

Facebook obviously sees this as the future, as Tim Bradshaw, a technology reporter with the Financial Times explained: “This is a very hot market at the moment, there have been many different of these chat apps popping up. There’s WeChat in China, there’s Line in Japan and other parts of Asia – but WhatsApp is by far the biggest of all of them, which is why Facebook has paid such a huge price.”

The message of youth

The advantage for Facebook is that it gets access to younger users who have never joined the social networking site and are not likely to.

They are increasingly using instant messaging, via their internet connected smart phones, rather than text messages.
“When you look at how much growth WhatsApp has managed to achieve over the last number of years from about 200 million users to 450 million users – which is way more than the likes of Twitter – I think it is a way for Facebook to engage the younger market it has been losing favour with over recent quarters,” said Brenda Kelly, a market analyst with IG.

Facebook – which has seen its growth slow recently – also gains a massive amount of data about real-time social interactions.

$19 billion!

On Wall Street investors obviously felt it was a very expensive acquisition – with Facebook paying $42 (30.6 euros) for every WhatsApp customer – and its shares fell in value.

Rick Summer, an analyst with Morningstar, said: “This is a tacit admission that Facebook can’t do things that other networks are doing.”

He pointed out that Facebook had photo-sharing and messaging before it bought Instagram and WhatsApp.

“They can’t replicate what other companies are doing so they go out and buy them. That’s not all together encouraging necessarily and I think deals like these won’t be the last one and that is something for investors to consider.”

It is not clear how Facebook can make any real money from WhatsApp. Zuckerberg said there are no plans to run adverts on the service.

Ukrainian roots

WhatsApp is a Silicon Valley startup fairy tale, founded by a Ukrainian immigrant who dropped out of college,Jan Koum, and a Stanford alumnus, Brian Acton.

Chief Executive Officer Koum, 37, grew up mostly in the Ukraine having arrived in the United States at the age of 16, and his eastern European background was key to WhatsApp’s creation, according to Jim Goetz, a partner at venture capital group Sequoia Capital which backed the company.

Unlike companies such as Google and Facebook, which try to learn as much as possible about each user, WhatsApp does not collect personal information such as name, gender, or age, Goetz wrote in a blog post, and messages are deleted from servers once delivered.

“It’s a decidedly contrarian approach shaped by Jan’s experience growing up in a communist country with a secret police,” Goetz wrote. “Jan’s childhood made him appreciate communication that was not bugged or taped.”

Koum’s view was evident in a tweet he wrote last year about Iran and Turkmenistan blocking WhatsApp. “When government gets in the way, consumers and freedom to communicate suffers,” he wrote.

He also sees advertising as an imposition. “When advertising is involved, you the user are the product,” Koum wrote in a 2012 blog post, disparaging the effort other companies make to collect personal data.

That same year, he quoted singer Kanye West in a tweet, writing, “You think you free but you a slave to the funds, baby.”

Last month, as the crisis in his home country of Ukraine escalated, Koum posted photos of revolutionaries and tweeted “praying for peace and quick resolution to the crisis #ukraine #freedom.”

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Trump Comments on Stock Market’s latest drop – says it’s ‘peanuts’

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Trump says Tuesday’s market drop is ‘peanuts’

President Donald Trump played down the stock market’s losses on Tuesday as “peanuts” when compared with the importance of striking a good deal with China and the gains since his election.

The Dow Jones Industrial Average “was about 16,000 or 15,000 and now it’s almost at 30,000,” Trump said at the NATO summit in London. “It’s going to be at 30,000.”

“If the stock market goes up or down — I don’t watch the stock market. I watch jobs. Jobs are what I watch,” he added. Today’s move is “peanuts compared to — we have picked up record numbers so that’s OK. That’s the way I feel.”

The major stock indexes slid Tuesday after Trump said he thinks it would be a good idea to delay signing a trade deal with China after the 2020 presidential election. The Dow Jones Industrial Average fell more than 450 points at its lows on Tuesday, led lower by trade-vulnerable AppleCaterpillar and 3M.

“In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now, and we will see whether or not the deal is going to be right,” Trump told reporters before U.S. markets opened Tuesday. When asked if he had a deal deadline, he added: “I have no deadline, no. … In some ways, I think it is better to wait until after the election if you want to know the truth.”

Despite his assurances that he doesn’t watch the market’s daily moves, Trump often tweets within hours of when the U.S. equity market reaches an all-time high. He has tweeted the keyword “stock market” 107 times since his inauguration

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11 kids quotes we’re all feeling

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Ok so there’s always that time when you just wish so bad you could straight up say whats on your mind, but you know you really shouldn’t, so you don’t. Well leave it up to kids to say exactly what you’re feeling, no hesitation or regret. Check out these kids quotes that say everything you wish you could!

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THIS IS A WHOLE (FOOD) MOOD.

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More good reads

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Saturday savagery (submitted anonymously) #savage

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Why do kids say the darndest things? Comment with your favorite!

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How to become a better businessman in 6 steps; Priceless advice from Entrepreneurs

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Become a better businessman in 6 steps following this priceless advice from accomplished entrepreneurs.

  1. “Do something you’re very passionate about, and don’t try to chase what is the hot passion of the day.”

    Jeff Bezos accentuates having passion for what you are doing, because if you don’t love it you are much more likely to give up. It’s hard to take an idea and turn it into reality, especially by yourself or when people whom you respect tell you it can’t be done. The passion and love you give to your project will determine it’s success rate over time.

    Jeff Bezos Become a better businessman

  2. “Don’t let people who you may respect and who you believe know what they are talking about tell you that it can’t be done.”

    Pierre Omidyar continues to say that often they will tell you it can’t be done and that’s only because they don’t have the courage to try it.

    Pierre Omidyar become a better businessman

  3. “If you know exactly who you want to be, you need to spend as much time [as possible] with people that are actually that already.”


    This advice from Gary Vaynerchuk is actually priceless when it comes to success in the business world. Think as well “It’s not what you know but who you know,” and surround yourself with people you look up to. Human’s adapt to their surroundings quickly, and soon you won’t just want to be an entrepreneur, you will also know how to act like one.

    Gary Vaynerchuk

  4. “Come up with 10 new ideas every day.”


    Coming up with at least 10 new ideas every day will keep your “idea muscle” in shape, which is critical for an entrepreneur in order to keep going and stay ahead of the fast paced business world. James Altucher continues to say that once you’ve done this for about 6 months you will be an idea machine. New ideas keep passionate projects alive and ensure growth in every direction.

    Read Next: Working for yourself; Pros and Cons

    James Altucher become a better businessman

  5. Realize that, “naturally, nobody is interested in your ideas. You have to persuade them, and you have to show them that you are the one person out there that can do it.”



    Robert Greene, an American author known for his books on strategy, also says that “no one is really going to help you or give you direction.” Realizing this sooner than others will give you a head start and the ability to stop looking for recognition in others. Instead, you can focus on your passion project and make it perfect, and the world will not be able to ignore it.


    Robert Greene


    More about ‘Mastery’ by Robert Greene

  6. “Don’t think about ‘how do I get big fast.’ That will happen if you build something meaningful and important.”




    How to encourage teamwork in your organisation


    Danae Ringelmann’s advice is not something to skip. If you rush your ideas or your product you will be relying on luck more than anything to create success for you. While luck is certainly involved in alot of things, relying on it or betting on it to ‘get big fast’ doesn’t help you become a better businessman. Being proud of what you create, instilling passion into your work, and working hard will ensure success more than anything.


    danae ringelmann

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