Mark Zuckerberg — the young lord of Silicon Valley — expanded his reach on Wednesday by buying cross-platform messaging system WhatsApp for $19 billion — $4 billion in cash, $12 billion in stock and an additional $3 billion in restricted stock to employees.
The purchase was welcomed by Facebook shareholders, who, after a brief dip, saw their stock close up almost 2 percent on the day.
I have written that bitcoin is not the new digital currency; the new digital currency is stock, and Silicon Valley is mining growth as its coin of the realm.
Zuckerberg did far more than just buy a very advanced app company. He sent a message of his own to Silicon Valley: The takeover wars have begun. They are about growth, not price.
Why else would Tesla CEO Elon Musk have confirmed last week that he met with Apple’s merger and acquisitions (aka business development) team last year?
It’s top-line growth everyone in the Valley is looking for, not synergies.
Upon being peppered with questions on the conference call about how Facebook intends to monetize the mind-blowing $19 billion purchase, Zuckerberg gave an answer just as flabbergasting as it was insightful. The 29-year-old multibillionaire said, “I don’t personally think ads are the right way to monetize messaging.” And, “Our explicit strategy for the next several years is to focus on growing and connecting everyone in the world.”
I’d like to see the Wall Street bankers plug that one into their spreadsheets.
So Facebook’s acquisition of WhatsApp may be the opening salvo in what is bound to become a bubbly race to spend as much Silicon Valley “digital currency” as necessary to grow faster than the next guy.
Now even the lesser lords of Silicon Valley are looking to get hitched — and quickly.