That said, this is a staggering amount to pay. I'm not familiar with Facebook's financials, but I'm surprised they could even afford this. I'd chalk this up to Zuckerberg's paranoia about no longer being #1 and less to a bubble.
The last bubble, people thought than making stuff available online was enough (Do X but on the internet). The first crisis taught us you need to have an actual business model and a way to acquire client.
But then, Google happened. Big user base can be monetized. So we have a second bubble where acquisition of user is the main driver, with the assumption than like google they will find a way to milk their users. At some point that bubble will explode too.
It's not? They had users back then, too.
They spent on WhatsApp $4B (cash) and $(12+3)B (in stock). $12B is nothing when you have $173B.
If the $173B evaluation is correct, it's a totally different story. But as long as people think it's correct, Facebook can profit and buy any competitor with investor's money.
Companies in 1998/99 weren't lacking in users. ICQ was purchased for $400 million in mid 1998, and had over 80 million users a year later (over 100 million by 2001). It too was run by a thin team, of just 70 people total (quite the accomplishment considering the technology of the time).