Why Facebook's Big Buy Makes Perfect Sense

Facebook agrees to acquire WhatsApp for a whopping $19 billion. That's an awful lot to pay, but Facebook will be getting an awful lot in return.

Feb 21, 2014 at 9:00PM

Facebook (NASDAQ:FB) is dropping a pretty penny to acquire WhatsApp, the young mobile messaging platform that has taken off. WhatsApp now boasts over 450 million monthly active users, with an incredible 70% of those accessing the service on a daily basis. That's an even higher level of daily engagement than even Facebook enjoys.

For $19 billion, Facebook will gain an important foothold in key strategic areas. Facebook's own Messenger has never been positioned as a mobile real-time messaging service. Since Messenger was historically a desktop service before expanding into mobile, it has social expectations somewhere in between SMS and email. In contrast, WhatsApp is very much mobile first and a legitimate SMS replacement. The two services has very different use cases.

Furthermore, the deal will also dramatically expand Facebook's international presence. In the U.S., players like Apple (NASDAQ:AAPL) offer iMessage for free. Apple grabbed 45% of smartphone sales last year, and if the majority of someone's contacts are on iMessage, there is less reason to sign up for WhatsApp. WhatsApp is incredibly popular in geographies like Europe, Latin America, India, and Asia, which is good news for Facebook.

In this segment of Tech Teardown, Erin Kennedy discusses Facebook's big buy with Evan Niu, CFA, our tech and telecom bureau chief.

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Erin Kennedy owns shares of Apple. Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple and Facebook. The Motley Fool owns shares of Apple and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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