By MARK SCOTT – Bits/NYT
BARCELONA, Spain – Many analysts and technology insiders have suggested that Facebook is overpaying for WhatsApp, the mobile messaging service that it is buying for up to $19 billion.
Mark Zuckerberg isn’t one of them.
“By itself, WhatsApp is worth more than $19 billion,” Mr. Zuckerberg, Facebook’s chief executive, told an audience on Monday at the Mobile World Congress conference here. “Few services in the world can reach one billion users, and they are all valuable.”
Mr. Zuckerberg said the acquisition, the largest ever by his company, would allow WhatsApp to focus on connecting more people around the world, instead of having to generate revenue if it had remained an independent company. WhatsApp says it has around 465 million monthly users, and Facebook says it is on track to reach one billion subscribers.
In front of a packed auditorium of global telecom operators, as well as the prince of Spain and his wife, the Facebook chief also pitched his plan to drastically cut the cost of delivering basic Internet services on cellphone, particularly in emerging markets.
Last year, Facebook teamed with a number of the world’s largest tech companies, including Nokia, Samsung, Ericsson and Qualcomm, in a project called Internet.org. The goal is to offer free or low-cost Internet services to consumers in developing countries that currently do not use the Internet through their handsets.
Mr. Zuckerberg said on Monday that Facebook was looking for up to five more carriers in emerging economies to help to expand the initiative during 2014.
For Facebook, poorer countries in Asia, Africa and Latin America represent the biggest opportunity to reach new customers, though it must figure out how to get people there online at low cost.
In response to questions from the conference moderator about privacy, Mr. Zuckerberg said that the United States government “blew it” when it came to the accusations that the National Security Agency tapped into Internet services to gain intelligence information.
“The N.S.A. is a real issue for America Internet companies,” he said. “The government has a responsibility to protect individuals and be transparent on what they’re doing.”
Many WhatsApp users, particularly in Europe, have also voiced concerns that Facebook may look to tap into their messages to find new ways to generate revenue.
Mr. Zuckerberg said that he had no plans to use WhatsApp data, and that the messaging service would continue to run autonomously. He added that the goal was to allow WhatsApp to focus on adding users.
“It would be silly to get in the way of that,” he said.
Before Facebook agreed to buy WhatsApp for $16 billion (the figure could rise to $19 billion depending on certain incentives for WhatsApp employees), it had tried to pay billions of dollars for another mobile message service, Snapchat.
During a question-and-answer session with the conference audience on Monday, Mr. Zuckerberg chuckled when asked if Facebook was still considering a new offer for Snapchat.
“After buying a company for $16 billion,” he said, “you are probably done for a while.