Seeking Alpha

Alibaba pours $215M into Tango at $1.1B valuation; implications for BBM?

  • A month after Facebook spent $19B on WhatsApp, soon-to-be-public Alibaba (ABABA) is investing $215M into messaging/VoIP app Tango at a $1.1B valuation.
  • BlackBerry (BBRY) investors might want to take notice, as Tango and BBM are close to each other in scale. While WhatsApp claims a market-leading 465M MAUs, Tango claims 70M. Last month, BlackBerry exec John Sims disclosed BBM's base had grown to 85M MAUs since the launch of Android/iOS apps last fall.
  • The Tango deal is the latest in a string of investments made by Alibaba to grow its Web/mobile empire as a 3-way battle between the e-commerce giant, Tencent, and Baidu continues raging. It comes a day after Tencent disclosed its WeChat mobile messaging platform had 355M MAUs (the lion's share in China) at the end of 2013.
Comments (21)
  • rmunjal
    , contributor
    Comments (7) | Send Message
     
    Believe BBM would be valued much higher than tango, atleast 2x
    20 Mar, 09:47 AM Reply Like
  • David653
    , contributor
    Comments (1481) | Send Message
     
    Rmunjal, if what you say is true, why didn't someone buy BlackBerry for 4.7B? That price would have included BBE, handset business plus all the real estate. It's because they are not making money. As a smart investor Kevin Oleary of Dragons Den would say "show me the money" who in their right mind is going to buy a business that costs rather then pays?
    20 Mar, 10:09 AM Reply Like
  • Cubanezul
    , contributor
    Comments (15) | Send Message
     
    I would say....in a week after the ER i will show you the money for $BBRY :) Just watch and take the profits.
    20 Mar, 10:16 AM Reply Like
  • pjews
    , contributor
    Comments (348) | Send Message
     
    Valuation of BBM is done every time it's competitors are either being sold or some investment are been done in them. The real value of BBM will come out in second quarter of 2015. Because the influx of the new Z3 sales in the emerging market, where BBM has a stronghold and is very popular.
    20 Mar, 10:54 AM Reply Like
  • farmwersteve
    , contributor
    Comments (290) | Send Message
     
    David. Do you think Kevin oleary would have thought $19 billion for whatsapp was a smart move considering there $450 annual revenue?
    20 Mar, 01:58 PM Reply Like
  • ELLAS
    , contributor
    Comments (1529) | Send Message
     
    David653,
    BlackBerry's "4 Sale" sign was an obvious mistake, that is why it never got sold. You know as well as I know BlackBerry is "Greatly Undervalued".
    For your information, why don't you ask Kevin Oleary of Dragons Den what phone he uses.
    Q10/Z10 ;)
    20 Mar, 07:33 PM Reply Like
  • rsbduff@gmail.com
    , contributor
    Comments (438) | Send Message
     
    If you are just a numbers-to-valuation person, that means that Facebook (at 1.1 B) would be worth about $15 B. MMMMMM.... there goes that theory.

     

    RSBDuff
    20 Mar, 10:01 AM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (764) | Send Message
     
    Obviously you can't value businesses only based on their MAUs, but I'd say BBM has a lot more in common with Tango than with Facebook.
    20 Mar, 10:12 AM Reply Like
  • Pete P.
    , contributor
    Comments (532) | Send Message
     
    Ali is really making some great investments for the future. Good for them.
    20 Mar, 10:08 AM Reply Like
  • rsbduff@gmail.com
    , contributor
    Comments (438) | Send Message
     
    Comparing Tango to Blackberry?
    I think Tango and Facebook are a better comparison.
    I didn't notice that Facebook or Tango had a hardware base that includes the defense department, and 85 M long term followers.

     

    Don't get me wrong, Blackberry has a lot of challenges, but your numbers/comparison theory is still a stretch of your imagination.

     

    RSBDuff
    20 Mar, 10:28 AM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (764) | Send Message
     
    I said Tango and BBM, not Tango and BlackBerry (the entire company). Big difference.
    20 Mar, 10:31 AM Reply Like
  • leamago
    , contributor
    Comments (85) | Send Message
     
    I know its not clear to most people yet. User engagement is the new indicator of success. Not the number of MAU's. WeChat, Line, Tango etc are SMS platforms. Text to a person with a cell phone number for the most part. BBM is the only true anonymous platform. All others will disclose a phone number or email address, meaning NOT anonymous. Also, BBM is BBM Channels, a social platform. You cannot separate the two anymore. FB buying whatsapp will make them the only true competitor to BBM AFTER FB somehow merges whatsapp with FB. Until then, BBM stands alone in this new category. In summary, you can have a billion MAU text messages that cannot really be monetize in its-self, but you can monetize 85m MAU's that engage within a social platform.
    20 Mar, 11:38 AM Reply Like
  • Loon-a-tick
    , contributor
    Comments (1464) | Send Message
     
    Anybody who is long on BB needs to read "1930's Trading Style People Don't Want You To Know" in the National Post from Toronto. Read it keeping the price of BB stock in mind.
    I'm still long but you really need to read it.
    20 Mar, 12:38 PM Reply Like
  • Zack 800
    , contributor
    Comments (710) | Send Message
     
    @Loon-a-tick

     

    Thanks for the info...really makes you think when a guy like D. Loeb takes an interest in BB. Just hope that his interest is sincere and not just a means of manipulating BB stock. Not a big fan of shortsellers...just saying...
    20 Mar, 02:33 PM Reply Like
  • Z10isgreat
    , contributor
    Comments (226) | Send Message
     
    Loon-a-tick would love to read it but I've searched the National Post for the article you mention and come up blank. Do you have a link?
    21 Mar, 08:13 PM Reply Like
  • riskabsorbant
    , contributor
    Comments (10) | Send Message
     
    once we get a good deal and worth while....BBM will be accquired...just wait
    20 Mar, 01:26 PM Reply Like
  • 10553331
    , contributor
    Comments (96) | Send Message
     
    Valuation of BBM, based on Tango or WhatsApp is basically sport and not all that meaningful. BBM is being developed and isn't for sale right now. In fact, it will only be for sale should Blackberry as a whole fall apart. This is a 2 year story that has yet to play out.

     

    This quarter's earnings will offer a direction. The accounting losses are done. Operating losses will still be there, though less than before. BES utilization will be revealed and next quarter, sales of the new models will start to show. The trend will guide the market. No one really knows how BB will fair by 2016. If you believe it will be good, go long. If not, stay away. Shorting is fine, as it keeps the market honest, letting the optimists know they have doubters. What isn't fine is bashing a company in order to make your short pay. While I doubt bashing on SA has consequences to the actual market, it does contribute to a negativism that pushes the market by emotion and denies a company with a good product the open mindedness of the customers it needs, to succeed. While BB is guilty of not knowing its market, the media, with its relentless reporting of BB is dead hasn't helped BB. Of course, it is the company's responsibility to combat this, when Chen seems to be doing to a great degree.
    20 Mar, 02:27 PM Reply Like
  • ELLAS
    , contributor
    Comments (1529) | Send Message
     
    10553331
    Wonderful Comment. You hit the nail on the head. Everybody should read it.
    Thanks,
    20 Mar, 07:29 PM Reply Like
  • ELLAS
    , contributor
    Comments (1529) | Send Message
     
    Kevin O'Leary dumps his iPhone for the BlackBerry Z10
    http://bit.ly/1mjJ2cB
    20 Mar, 07:36 PM Reply Like
  • metss41
    , contributor
    Comments (6) | Send Message
     
    now it's kevin o'leary getting on the blackberry express every week we have another all star joining our team go blk berry keeping the dream alive who do you like jorge
    20 Mar, 10:09 PM Reply Like
  • Z10isgreat
    , contributor
    Comments (226) | Send Message
     
    I like that Kevin acknowledges the elephant in the room - that people still think it is the old blackberry. Did you notice the screen shots cut in to the Financial Times television interview recently with John Chen? While they did eventually show the Z10, the shots on the screen every time they mentioned 'blackberry' were invariably old devices - The Bold, The Torch - this is about as honest as showing a Commodore 64 every time someone mentions the word computer.
    21 Mar, 08:44 PM Reply Like
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