This refers to the editorial "Why WhatsApp" (February 24). WhatsApp's buyout by Facebook for an astronomical sum underscores the phenomenal rise of "innovative" information technology (IT). Facebook, a pioneer in this business, is 10 years old and now valued at $134 billion. It has a huge client base of 1.25 billion of which around 1 billion are mobile users. What specific commercial leverage Facebook expects to gain from this deal is vague. Facebook, too, would be less than clear on a road map as to how to carry this acquisition forward or the level to which WhatsApp could take it before another application intercedes or messaging itself gets turned on its head. The stand-alone world of IT operates on an abstract plane where evaluations have no collateral such as fixed assets or securities to guide estimates. IT acquisitions being more on stocks and less in cash only deepen the mystic valuations. All this would be fine if the sector had used an equally abstract currency such as Bitcoins. But the trade happens in dollars and therein lies the rub. A bubble burst in this translucent region of IT could expose other sectors to negative repercussions.
R Narayanan Ghaziabad
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