Updated from 1:43 p.m. to include information about additional purchases in the seventh paragraph.
When the social networking giant announced last week it was buying WhatsApp for $19 billion, there was some concern from investors that the company was overpaying, considering the company had limited revenue and likely wasn't profitable.
However, during his talk at Mobile World Congress, Zuckerberg noted WhatsApp is likely worth more than $19 billion on its own, given the reach it has already.
Zuckerberg thinks WhatsApp by itself is worth more than $19B, as it's getting close to ~500 mln peopleChris Ciaccia (@Chris_Ciaccia) February 24, 2014
Zuckerberg went on to say, "It's hard to make that case today because they [WhatsApp] have so little revenue, but look at the messaging apps already out there." The other competitors, such as KakaoTalk, WeChat and Line are already able to monetize their user base, and WhatsApp is just starting to do that.
Analysts agreed with Zuckerberg, noting that the scale of WhatsApp is enormous at this point and only likely to get bigger. "While the acquisition price seems high, and the valuation is difficult to justify for a company with immaterial revenue, platforms of WhatsApp's scale and growth have significant strategic value," Stifel Nicolaus analyst Jordan Rohan wrote in a note last week. "In short, Facebook has with the acquisition of Instagram and WhatsApp muted the strategic risk of Google acquiring its way into social media and communications in a real way. We believe Facebook shares would have been pressured by more than single-digit percentages in after-market trading if Google had purchased WhatsApp instead."
Judging by this chart, it appears all concerns about Facebook overpaying for WhatsApp have been put to bed.
Fear not though, Facebook investors. Zuckerberg was asked if he would consider buying Snapchat, which Facebook was rumored to have offer $3 billion for, only to be turned down. "After buying a company for $16 billion," Zuckerberg said, "you are probably done for a while."
Of course, he did say this after the Instagram purchase as well.
--Written by Chris Ciaccia in New York
>Contact by Email.