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What the $19 billion Facebook just spent has to do with Apple

By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
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By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
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February 20, 2014, 3:51 PM ET

FORTUNE — Judging from the sheer volume of commentary generated by Facebook’s (FB) $19 billion offer for WhatsApp, it seems everybody in the tech world is having a hard time swallowing the sticker price, even if most of it comes in the form of Facebook shares that may or may not be overvalued.

$19 billion puts into perspective the $12.5 billion Google (GOOG) spent on Motorola — until yesterday the prime example of how quickly Internet billions can be poured down a drain.

Much as I hate to admit it, I think Kara Swisher put her finger on what this is about in her Re/Code post:

“We have now established,” she wrote Wednesday, “a price floor for what it costs not to have a mobile operating system in a world in which having a mobile operating system counts for an awful lot these days. And that means, for all intents and purposes, Google’s Android operating system and Apple’s (AAPL) iOS…

“A mobile presence is a must-do in the current digital environment, and this massive acquisition makes it clear that Facebook has decided that its core strategy will be to create or buy up must-have apps that consumers demand to have on their mobile devices.”

Link: Facebook Price for Having No Phone OS? $19 Billion. A Must-Have Apps Play? Priceless.

About the Author
By Philip Elmer-DeWitt
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