Facebook's $16 billion purchase of messaging start-up WhatsApp isn't rational by any traditional financial metric, but the deal does launch a major salvo in the new war for time spent by users on their mobile devices, said Richard Greenfield, media and technology analyst at BTIG.
"This gives Facebook a tremendous share of time spent on mobile devices, not just in the U.S. but globally when you tack on Facebook plus Instagram plus WhatsApp," he said Thursday on CNBC's "Squawk Box."
The "crazy" price tag for WhatsApp has many people shaking their heads, like they did when Mark Zuckerberg bought photo-sharing service Instagram for $1 billion in a deal hatched over a weekend two years ago, Greenfield said.
It's no wonder why Facebook would want to own WhatsApp from a sheer user perspective. With more than 450 million monthly active users—about 70 percent of whom are daily active users—the 55-employee company said it's adding more than a million new users per day. That puts it on pace to crack a billion next year.