Fair notice: this essay has a trick title.
Mark Zuckerberg, Facebook’s Co-Founder, Chairman, and CEO, recently spent up to $19 billion to buy WhatsApp. You might have heard.
Whether Mr. Zuckerberg overpaid is a subject of frenzied speculation for those who must have an opinion. We do know that no one else thought it was worth more; rather, that no one else with a spare $19 billion thought it was worth more. We know that because Mr. Zuckerberg was 1) willing to pay 2) more than anyone else. Otherwise the media would be all aflutter about what someone else was uniquely willing to pay.
Of course no one knows what WhatsApp is worth. To know what it’s worth implies full knowledge of the future, including a host of related matters such as the skill Mr. Zuckerberg and his team will bring to bear, how much it’s worth to Facebook to prevent someone else from acquiring WhatsApp, what Mr. Zuckerberg could have hit had he aimed his $19 billion elsewhere, and much more. (In other words, otherwise.) Google, another potential acquirer, had its own calculus. …Read More →