Software // Social
Commentary
2/21/2014
00:00 AM
Connect Directly
LinkedIn
Google+
Twitter
RSS
E-Mail
50%
50%

What Else Could Facebook Buy With $19 Billion?

If it's hard to get your mind around just how much $19 billion really is, here's a few other purchases to put it into perspective.

The $19 billion Facebook spent to acquire messaging service WhatsApp is a staggering sum. But in an age when Silicon Valley companies routinely spend billions of dollars to acquire technology, talent, and customers, it’s hard to wrap your mind around just how much money this actually is.

To put the purchase price into perspective, I poked around on the Internet to see what else Facebook could have bought. Here are five options that might help demonstrate just how much $19 billion can get you.

1. A Private Island

Yachts used to be a status symbol of the super-rich, but to maintain an appropriate level of exclusivity, a really sweet move is to buy your own island. For instance, in 2012, Larry Ellison spent $300 million to purchase 98% of the Hawaiian island of Lanai and everything on it, including hotels and grocery stores. While one-third of a billion dollars is not chump change, Facebook could’ve bought at least 57 islands at that price with the money it spent on WhatsApp.

2. Famous Works of Art

Buying a messaging business is cool, but consumers are a fickle bunch—today’s hot startup is tomorrow’s old business model just waiting to get disrupted. If you really want a timeless investment, look no further than the art world. From European masters to twentieth-century Pop Art, the brushwork of dead white guys promises lasting value.

Record sales have been set both at auction and in private deals in the past five years, including $269.4 million for Cezanne’s “The Card Players”, $155 million for Picasso’s “Le Reve”, $142 million for a Francis Bacon triptych, $122 million for a pastel of Edvard Munch’s iconic “The Scream” and Warhol’s “Coca Cola [3]” for $57.2 million.

Total price for these five works? A mere $745.8 million.

 

3. A Sports Franchise

In 2012, the Los Angeles Dodgers were sold for $2 billion to Magic Johnson and Guggenheim Partners, making it the most expensive purchase of a sports franchise ever. I don’t know if the folks at Facebook are into sports, but if they are, $19 billion would easily get them one team each in the MLB, NFL, NBA and NHL, with plenty left over for beer, hot dogs and several more Instagrams.

4. A Pyramid

According to the Web site Live Science, it would cost approximately $5 billion to build the Great Pyramid of Giza today. We’re talking some real money here, but it also seems like a reasonable price for a monument that has stood as a marvel of human ingenuity for over 4,500 years. And just think how jealous Apple and Google would be while they watched thousands of Facebook interns wrestle 400-pound limestone blocks into place as the pyramid rises toward the Menlo Park skyline. Totally worth it.

 

5. A Government

In the last presidential election, the Democrats and Republicans raised just over $2 billion dollars by September of 2012. This total only accounts for the fund-raising activity of the two presidential candidates, the two parties, and two super PACs (one each affiliated with a candidate). It was the most expensive presidential election in history—but not nearly as expensive as a text messaging service.

Of course, the president can only do so much. If you really want to ensure that your legislative priorities get through, you might as well buy the whole thing. According to the Federal Election Commission, the total amount spent on all races in 2012 was $7 billion. Just $7 billion? Why not. After all, owning a senator isn’t cool. You know what’s cool? Owning all the senators.

Are you frustrated trying to get your technology teams to collaborate? Then don’t miss Humans Aren’t Computers: Effective Management Strategies for IT Leaders at Interop Las Vegas. This workshop examines what motivates us as people and will teach assertive communication and conflict resolution strategies that will help re-engage the staff and encourage organizational change. Register here.

Drew is formerly editor of Network Computing and currently director of content and community for Interop. View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Oldest First  |  Newest First  |  Threaded View
anon0631711623
50%
50%
anon0631711623,
User Rank: Apprentice
2/21/2014 | 4:22:29 PM
I don't understand the attraction...
This is the first I have heard of Whatsapp, so maybe I am missing something... but from my understabding, it's just a messaging application. I am sure that, if FB really wanted to buy one of those, it could have had AIM for a lot less...
paradisedrummer
50%
50%
paradisedrummer,
User Rank: Apprentice
2/21/2014 | 4:42:32 PM
Put this up against some gov't purchases
4.2 Nimitz class aircraft carriers. Largest warship ever built, each with ~6000 crew. 
Thomas Claburn
50%
50%
Thomas Claburn,
User Rank: Author
2/21/2014 | 5:07:00 PM
Re: Put this up against some gov't purchases
And with that kind of firepower, Facebook could keep its users from jumping ship.
Charlie Babcock
50%
50%
Charlie Babcock,
User Rank: Author
2/21/2014 | 6:39:52 PM
An island package deal
Interesting, Drew, totally. Bill Gates bought an island off Belize. Larry Ellison bought 98% of a Hawaiian island. I'd like to know what you could get in the way of islands for the whole $19 billion. How about all the Hawaian islands? I wouldn't settle for anything less than the entire Aleutian chain including Kodiak. How about the Hebrides, Orkneys plus the Shetlands as a package deal? I'm sure there's a combination in the Carribean that's worth a lot. Not sure whether Raul is willing to sell.
athorndike
50%
50%
athorndike,
User Rank: Strategist
2/22/2014 | 4:08:16 PM
$19B is a Whole Lotta Dough
I am still having a hard time comprehending the amount of money, even with these great examples. It seems like AIM, BBM and perhaps even Skype's instant messaging missed a good opportunity here. Or Facebook did - by not buying one of these for a lot less. Then they still could have bought a sports team or an island (or both).
Drew Conry-Murray
50%
50%
Drew Conry-Murray,
User Rank: Ninja
2/24/2014 | 9:53:29 AM
Re: I don't understand the attraction...
My understanding is that WhatsApp is enjoying incredible growth--around a million users a day, according to some reports. That's appealing to Facebook for two reasons. One, it gives them a growth story that Wall Street will like. Two, it takes a potential FB replacement off the table. That said, it still seems like an outrageous amount of money.
Social is a Business Imperative
Social is a Business Imperative
The use of social media for a host of business purposes is rising. Indeed, social is quickly moving from cutting edge to business basic. Organizations that have so far ignored social - either because they thought it was a passing fad or just didnít have the resources to properly evaluate potential use cases and products - must start giving it serious consideration.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - July 22, 2014
Sophisticated attacks demand real-time risk management and continuous monitoring. Here's how federal agencies are meeting that challenge.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.