Firm Says China’s WeChat Messaging App Is Worth $60B
Facebook’s (NASDAQ:FB) enormous $19 billion deal with messaging app WhatsApp turned heads last month as some questioned whether the social app was really worth all that cash. Facebook CEO Mark Zuckerberg has said that WhatsApp could be worth even more than the $19 billion he paid for it, and now analysts are trying to determine the valuation of various messaging apps based on WhatsApp’s $19 billion.
In a research note seen by TechCrunch, Crédit Lyonnais Securities Asia estimated the value of the Tencent (TCEHY.PK) owned Chinese chat app WeChat. Based on the fact that WeChat currently has more revenue streams than WhatsApp, the firm estimated that the app could be worth up to a whopping $64 billion. CSLA analysts Elinor Leung and Terry Chen wrote the note and said that WeChat is worth more than WhatsApp despite having fewer users because it generates much more cash per user.
WeChat has 300 million users compared to WhatsApp’s 465 million, but the firm believes that WeChat is on track to reach 450 million by the end of the year. WhatsApp has taken a very cautious approach to monetization, something that Facebook says it will maintain. Users pay for the service itself, which remains ad-free. The app even quotes Fight Club on its website: “Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.”
WeChat has also taken a cautious approach to advertising. For now the service is limiting the promotional activities of public accounts, but CSLA said that Tencent “will likely turn more aggressive on monetizing through social advertising once user penetration is mature.”