David Rosenthal: belief

Transcript context

…Right. We're going regulation is not really their key risk, it's really feeding into obsolescence and it's the thing that happened to social networks before them. Facebook has a lot of core competencies, but their very most central is not feeding into obsolescence. Buying Instagram is brilliant. Companies move on multiple fronts. They bought them another generation. I think WhatsApp is this similar thing where they carved off 10% of the value of their company to go get it, but should they have done that? Absolutely. Should they do it again? They should go do it five more times. Every time there's one of the seven billion plus users of social networks, or billion to be it in the near future, use of social networks is up for sale. They should go make a horcrux and carve off a piece of themselves, or do whatever they have to do, to go and get that thing, and keep their dominant position. The consumer sentiment couldn't be freaking worse on this company based on a lot of #deletefacebook, there's election stuff, they're in trouble left, right, and center. It is making more money than ever. There are more people using it than ever. Sure growth has slowed, but it's because they saturated humans on the Internet. I just think that this is such a complete and total no brainer. Even if they never make $1 off of WhatsApp to neutralize that threat and get to continue to own the world's digital attention, I think it’s not invaluable, but is very, very valuable to them and one way to look at this is, if you think there was a 10% chance that WhatsApp could have totally wiped out Facebook at some point in the future, then it was break even to buy it even if they never ever generate any cash flow. I agree. I just can't bring myself to give an A for not so logical reasons. Two comments to add onto that. One, in talking to a bunch of friends at Facebook and former Facebook friends, and thinking about this episode, one thing that is a core competency and I think from my understanding, really viewed as a core competency within Facebook is extremely robust competitive intelligence. They know this. They know everything you just said, and they are paranoid about it. What was that VPN app that they were using that they used a competitive intelligence to help them understand the……

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