David Rosenthal: uncertainty

Transcript context

…But to be fair, they keep all the data to themselves. By virtue of owning the entire end-to-end experience, they don't exchange it with third party ad networks or other websites, because you spend so much time with them, they own the data end-to-end. Absolutely true, but it would be interesting if there were a viable third, standalone, independent public company, which WhatsApp would certainly be at this point, that were a different vision of what a social media app looks like. Would they have figured out some of these business models that we talked about along the way, independently? I don't know. A lot execution risk there, but certainly wouldn't have threat. You nailed it. This is the real crux of grading. It’s not so much about what is Facebook gaining by owning it. It's how much they are decreasing their risk of having no value in the future by this thing existing. Facebook's entire business is maintaining attention share. So long as you are spending your time and attention with Facebook, they're going to keep printing money to the tune of 45% operating margin, $20 plus billion of profit a year. It's a freaking cash machine and by looking out in the world and observing WhatsApp and saying, “We’ll have to squint to your point in execution risk.” But there could be this thing that leverages all that connectivity that people have with each other. They’re exchanging messages which isn't so different than public posts, and they're exchanging statuses which isn't so different in the way that we started with wall posts. It could evolve into thing that steals attention share. The what would have happened otherwise way to think about this is, they could have been independent and they could have evolved to do their own social network or to your point earlier, Google could’ve bought them and that would have been catastrophic, because I think Google would've been the only formidable ones as you mention who could have paid up, but then also who would have executed attention-grabbing strategy there. To wrap this, I think my little rant here, what would have happened? One billion people could have shifted attention from Facebook to WhatsApp, but I'm going to hold off right now on trying to put a price on that until we get to grading.…

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