America Online to Buy Internet Chat Service for $287 Million (1998)
Someone mentioned about trying to find out if their have ever been any other chat services that have really made a lot of money on it's own, and it sparked memory of an acquisition that didn't happen quite that long ago, Microsoft buying Skype in 2011, and here is a good recent article about it:<p><a href="http://www.theguardian.com/technology/2013/aug/30/skype-microsoft-acquisition-analysis" rel="nofollow">http://www.theguardian.com/technology/2013/aug/30/skype-micr...</a><p>The bullet point that stands out for me is this:<p>• Problems monetising it: revenues at the time – $860m for the year, losses of $7m – amounted to just $1.30 per user per year<p>So, here we have a company, at acquisition, that was making close to the $1 per year per user that WhatsApp is charging.  At the end of 2010 skype had 663 million users and was acquired for $8.5 billion.  That's $12.82 a user.<p>Then, as now with WhatsApp, people are questioning whether Microsoft would ever make enough money to justify such a price.  Then, as now, people justified the price based on the sort of intangibles (getting rid of a competitor, strengthening the brand, tapping new markets, etc.) the WhatsApp acquisition is being justified with now.<p>But there is still the big difference that Facebook, with a business in a similar space (obviously still different but they both are chat/communication based), with a similar revenue model per user per year, but only 3 years later purchased it for $42.22 per user.  That's almost 4x the price for a similar acquisition 3 years apart.<p>And people thought Microsoft was crazy for the price they paid for Skype ... it kind of makes you wonder what the hell is going on.