[ChuckFrank]

The conspiratorially inclined explanations in me thinks that there might be another reason for this extreme valuation. Considering that just last year Google offered 1B for this service, and was denied because at that time Sequoia had invested at a 1.5B valuation, and Google had been unwilling to up their offer. It would appear that a 3B price or a 2x valuation would be sufficient. But clearly it was not. And I don't think it was because of competing offers from Yahoo! or others. Here's what I think might also be happening. I think some major surveillance outfit (NSA / Five Fingers / etc.) saw that by circumventing the telecom infrastructure and allowing for massive texting information to be 'funneled' through off-site servers, to support the WhatsApp service model, that they could harvest this communication without having to involved all the individual telecoms world wide. Instead they get a direct feed into the worlds texting data by buying the 'funnel' itself. And I think that they were willing to pay any price for this. I think that once Whatsapp figured this out, and came to terms with the fact that their technology was going to be used to circumvent traditional telecom limitations, they just went after as much as they could. And that turned out the be close to 19B dollars. The irony of course is that the one founder refers to the evils of soviet totalitarianism as part of his driving force. So it may be that when every thing is said and done, he provided a surveillance tool to an emerging regime of techno-fascism, the likes of which his previous hated regime could never imagine.

Again, this is just a shot in the dark. A wild stab at a rationale. But that's what will happen with an insane price valuation like $19B.

[cylinder]

What? Whatsapp is not secure by any means, I don't think it's even encrypted. NSA could easily monitor it using existing infrastructure. And how exactly do you propose NSA "funnel" money to FB to make this acquisition -- never mind that most of it was in newly issued stock (how does NSA compensate FB shareholders for this? how does it appear on balance sheet / income statement / cash flow?). Have you thought this through at all?

[ChuckFrank]

NSA regularly makes data requests to the major telecoms and to the major internet service providers. If they didn't need to, they wouldn't make the request. Obviously they still do because they need to.

Not only does FB have seed funding for the gov't, they have shown themselves to be much more inclined to provide access to their data, when compared with Google and others. FB would therefore be an excellent partner to circumvent the international telecoms through a single msg service.

Just because you can't think of how the money flows, doesn't mean it doesn't or that it hasn't. The CIA supported the Guggenheim foundation, and the Iowa Writers Workshop. They could easily provide institutional support for FB stock, thereby essentially saying to FB - get this company, and we'll have your back on the markets.

So the question is, not whether I've thought this through, since this is what I'm doing to justify the insane valuation, but whether you are willing to think it through, or instead dismiss it outright, until the time come when the evidence shows you to be wrong. As we learned with Snowden et al.