![]() It still is showing strong growth and has been very innovative in terms of embracing HTML5 to allow for better in-app experiences of playing games, doing searches and finding other information. It’s also been doing really well in India of late too. It’s been most successful with those who have yet to get a mobile phone in North America. Kik has 100 million users with no known plans to IPO. To get a WhatsApp-type multiple, the service would be worth more than $5 billion. That would only put a value on their users at just over $15. It’s discussed a potential $2 billion IPO this year. Its growth has plateaued recently as they’ve saturated Korea. KakaoTalk has 130 million users and is now working on plans for an IPO. There are also some other significant implications of the above math for others in the messaging space. If they get as good as Tencent, they will be worth significantly more than that. WhatsApp will then be worth $73 billion instead of $19 billion. Then, let’s assume they start to get at least as good as Line at monetizing their users. Let’s assume that WhatsApp will continue to grow like a weed and hit 1 billion users in a year or two. So, if you think that Mark Zuckerberg is smart – and he’s given you no reason to think otherwise – you can see why he might be excited about giving up 11% of his company and paying $19 billion for WhatsApp. Ads are not really part of this equation. It turns out, if you aggregate the users, you can sell to them. In Thailand recently, Line did a group-buying flash sale which was incredibly successful. For example, you can now pay for taxis and food in China through the WeChat app. Unlike in America, where the only way we seem to monetize a consumer app is through shoving ads at us constantly, over there, WeChat and Line make money through selling stickers, games, and also buying things. Therefore, the investors who know them best over there value them higher. ![]() The Asian messaging companies are vastly ahead of the North American messaging companies in terms of how they monetize. It all comes down to monetization of those users. It turns out that an international user is only worth less than a Western user if you only sell ads. That’s even though Sina Weibo has a similar number of monthly active users as Twitter. That’s why Sina Weibo will only get a $3 – 5 billion valuation when it IPOs in a few months compared to the current $32 billion valuation for Twitter. In North America, we’ve been told that Western users are worth more than international users. How can it be that WeChat’s users are worth $231 per MAU, Line’s are worth $73, WhatsApp’s are worth $42 and Viber’s are worth $9? That’s a heck of a lot more than the $19 billion for WhatsApp that everyone in the Valley is agog over. WeChat currently has around 300 million MAUs. They assume that half of Tencent’s current valuation of $140 billion is from WeChat’s growth in the last year. If you think that $73 per MAU sounds like a lot though, Nomura calculates that each WeChat MAU is worth $231. If they are able to get to 500 million by next year (in MAUs, not just registrations), it suggests that Line’s value will grow to $36.5 billion. I’ve heard that Line will seek a $30 billion IPO by June of this year. If you assume that Line will be at 300 million MAUs by mid- this year, this implies Line is worth $22 billion right now. They also said they were hopeful they could get to 500 million registered users by the end of this year. Back in November, Line said it had 300 million registered users which was up from 200 million a year prior. This wasn’t because these investors worried about having to go up against Facebook in their geographies now.Īccording to Nomura, the reason for the initial drop is that investors overseas had already assigned a valuation to Line of $73 per monthly active user (MAU). When the news broke last week about the price Facebook paid for WhatsApp, Tencent’s (the owner of WeChat) stock price in China and Naver’s (the owner of Line) stock price in Korea dropped.
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