TEMPO.CO, Washington, D.C. - Facebook's staggering US$16 billion acquisition of WhatsApp is seen as a sign of sheer desperation, according to an industry watcher, saying the social networking giant has overpaid for the mobile-messaging start-up. "This is crazy money. I think they massively overpaid for this. They've done it because they are desperate," Rob Enderle, principal analyst at Enderle Group, told CNBC yesterday.
Enderle thinks Facebook is afraid of losing its users. This is why they shell out exorbitant amounts of money in order to keep their users.
Enderle said the purchase of WhatsApp shocked the digital industry world. The choice shows the poor management of Facebook. Enderle believes the investors are not going to comment positively on the purchase.
The purchase of WhatsApp will not significantly increase Facebook users, according to Enderle.
CEO Mark Zuckerberg said the business focus of the acquisition is to attract more users and connecting more people around the world. He also promised not to push annoying ads that disturb communications.
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