

Bill Gates: Microsoft would have bought WhatsApp too, but not for $19B - ibsathish
http://www.theguardian.com/technology/2014/mar/14/bill-gates-microsoft-whatsapp?CMP=twt_gu

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dude_abides
Loved this comparison of 3 visionaries of our times by one of the 3:

 _Gates praised Zuckerberg’s drive, but described him as “more of a product
manager”, insisting that he was more of a coder starting with architecture
where Zuckerberg “starts with products, and Steve Jobs started with
aesthetics.”_

Gates = sw engr; Zuck = Product Manager; Jobs = UX. (To add to it, I would say
Page/Brin = research scientist.) These really reflect what each company has
morphed into. MSFT ended up as the largest software company, FB is probably
one of the most widely used product ever. Apple makes the best UI. And Google
uses research ideas, spits them into beta products quickly and rinses and
repeats.

~~~
gxs
What's especially interesting is how reviled the software engineer is on HN.
Maybe always doing the next logical thing to improve the bottom line rubs
people the wrong way - even those same types of logical people.

~~~
polymatter
the software engineer is reviled for completely separate reasons outside the
scope of this metaphor.

~~~
wmeredith
Yeah, the ruthless monopolist systematically destroying other software
engineers' companies/products/work is the part of Bill Gates that people don't
care for. His work after M$oft has been awe inspiring. How he got from where
we are to where he is now was kinda gross.

~~~
jameshart
I don't know what Microsoft did to you personally to make you so bitter, so
I'll ignore your tone and address your comments in the spirit of the post you
replied to - I think the point is, when looked at from the point of view of
_sound engineering principles_ , isn't that behavior somewhat logical? Having
one common operating system is just exercising DRY, once-and-only-once
architecture... and Microsoft's 'embrace/extend' approach to 'not-invented-
here' reimplimentation? That's just pragmatic refusal to take third-party
dependencies, which any engineer can probably relate to. You can object to how
that behavior manifests itself in the market when taken to corporate scale,
but at least consider the validity of the analogy.

~~~
wmeredith
So what if embrace/extend/extinguish logical? Eugenics is logical, but pretty
gross when you start applying it to actual people.

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binarymax
They should never have needed to even consider buying WhatsApp...I will never
understand why Microsoft killed of there Messenger platform. I guess you could
say because they bought skype and didnt want fragmentation, but skype served
an entirely different use case. When it was still around I had the IM app on
my phone and it was fine. Expanding it to lower end phones and supporting the
social community would have done it.

\--EDIT-- _Microsoft reported the service attracted over 330 million active
users each month, placing Messenger among the most widely used instant
messaging clients in the world._ [1]

[1][https://en.wikipedia.org/wiki/MSN_Messenger](https://en.wikipedia.org/wiki/MSN_Messenger)

~~~
tommo123
I've never used it but I was under the impression that Microsoft had not
killed off their Messenger platform, just MSN Messenger? They still run Lync
which is the business-oriented platform and where they stand to make actual
money.

~~~
dman
Lync is the buggiest Microsoft product out there. Messenger in comparision was
a real joy to use.

~~~
blktiger
The Mac client in particular is very buggy.

~~~
kimagure
The best part about the Mac client is that it stops me from shutting down my
computer (have to mash op-com-esc each time I forget to try to kill lync
before shutdown)

------
fleaflicker
Nice quote at the end:

 _Gates praised Zuckerberg’s drive, but described him as “more of a product
manager”, insisting that he was more of a coder starting with architecture
where Zuckerberg “starts with products, and Steve Jobs started with
aesthetics.”_

~~~
mercer
Which, in my view, expresses where my main concerns about facebook's future
lie (if I were an investor, I guess).

When Facebook introduced its plan to be a platform for developers to work on,
I loved the idea. It reminded me of Yegge's post on Amazon, and seemed to me
like a great way for Facebook to evolve to be the 'social layer' of the web.

Of course, they torpedoed that whole effort and kept going with their walled-
garden facebook-as-a-product approach.

And now that Facebook seems to lose some momentum/popularity (or is perceived
to be, which is still bad), they end up implementing part of the 'platform
model' anyways, except still within their walled-garden with facebook-made
apps.

It's quite possible that I'm missing the real reason why they are taking this
approach, but seeing Zuckerberg as a product-first guy might be a partial
explanation.

~~~
wpietri
I too loved the idea, but I think Facebook's naive implementation of it ruined
it for them.

In the early wave of Facebook apps there was a lot of stuff built that users
hated. In 2010, when my cofounder and I started doing user tests of some
Facebook app ideas, it turned out that people were very averse to using new
apps. If you use a regular app and it sucks, you remove it. But if you used a
Facebook app and it does something bad, you look like an idiot in front of all
your friends. It was a classic tragedy of the commons: the viral behaviors
that made early apps successful rapidly depleted the goodwill of users. And
people didn't blame the obscure companies doing the BS; they blamed Facebook.

The lesson we took from our user studies was to build something that was an
external website, and only mention Facebook integration once we'd had a chance
to get them more comfortable with us. And I'm sure the lesson Facebook took
was "don't let other people ruin our brand".

~~~
mercer
Indeed. I spent two months on a feature that was basically 'push every
pageview of x to the user's timeline', and facebook understandably removed
that feature just before launch.

However, it still doesn't really make sense to me. First of all, why not just
remove the abuse, or implement more app-store like curation to ban abusers.
And second, they didn't really seem to be too committed from the start, what
with the constant API changes that broke stuff left and right.

------
crucialfelix
Looked at differently, Facebook's P/E is 7 times Microsoft's. FB didn't pay
$19B they paid $16B in their own over-valued stock.

And their stock is more over-valued than MSFT's so that explains the
differential.

~~~
newobj
I thought $16B of the $19B was cash?

~~~
npizzolato
Nope. "Facebook said it will pay WhatsApp $4 billion in cash and $12 billion
in stock. WhatsApp's founders and staff will be eligible for for another $3
billion in stock grants to be paid out if they remain employed by Facebook for
four years. Koum will also join Facebook's board of directors."[1]

[1]:
[http://money.cnn.com/2014/02/19/technology/social/facebook-w...](http://money.cnn.com/2014/02/19/technology/social/facebook-
whatsapp/)

------
star0zero
The Rolling Stone interview that this story is based on is actually pretty
fascinating - I recommend it: [http://www.rollingstone.com/culture/news/bill-
gates-the-roll...](http://www.rollingstone.com/culture/news/bill-gates-the-
rolling-stone-interview-20140313). While his opinions on the myriad subjects
that interests him and his foundation can be argued and debated (and whose
opinions couldn't, honestly), you cannot deny his pragmatism.

------
randyrand
Econ 101, products are worth different amounts to different people.

~~~
netcan
Finance 101: the value of an investment is the discounted sum of future
cashflows.

~~~
josephlord
That doesn't contradict the parent's comment. In Facebook's hands that future
cashflow may be significantly large than in Microsoft's.

Also in a case such as this the value of the investment is the difference
between the expected future cashflow of Facebook alone and the combination of
Facebook and Whatsapp (as ownership of Whatsapp may increase cashflow at the
original Facebook part both through removal of competition and also driving
usage).

~~~
droopyEyelids
You actually don't have to contradict someone to continue a discussion or add
new information.

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saosebastiao
Part of the reason it sold for $19B was because Google, Facebook, and
Microsoft were interested. Narrow that down to one bidder, and all of a sudden
you have an app that sells for millions instead of billions. The power that
comes with being wanted by more than one party is incredible...it is the
reason why Mozilla was able to triple their payout from a company that had
already built a worthy competitor.

~~~
keithwarren
While multiple bidders juiced the price, saying it would be millions instead
of billions is just terrible logic.

WhatsApp had incredible value just through the user base alone, especially
considering its diversity in the global market (relative to FB who is strong
in what we consider the 'west' but not the far east).

If there are no other bidders it still sells for many billions and probably
north of 10.

~~~
saosebastiao
If there are no other bidders, it either sells for what the founders/VCs value
it at, or it doesn't sell at all. So you are right, that if Koum/Acton valued
it at billions and could convince some company that it was worth billions
(while not having the "proof" that anybody else valued it at billions), then
it would sell for billions. Not having proof is a pretty poor negotiating
position through.

~~~
nostrademons
They were profitable and cash-flow positive, so they just wouldn't sell at all
and choose to remain independent.

The story of how they sold the company has been reported in the press, and the
valuation was arrived at via comparison with Twitter's $30B public-market
valuation. WhatsApp had roughly 2/3 as many users as Twitter; they are in
similar industries, so it makes sense that its valuation should be roughly 2/3
as much.

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taspeotis
He said he didn't say they wouldn't buy it for $19B...

> Microsoft would have been willing to buy it, too. I don’t know for $19bn,
> but the company’s extremely valuable

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rbanffy
I am unsure how Microsoft would be able to leverage Whatsapp. It would be hard
to use it to drive Windows Phone acceptance and it has negligible value as a
desktop app.

~~~
Kluny
I disagree that the value of a desktop is negligible - for me, the "killer
feature" of facebook messaging, which I use the same way WhatsApp is used, is
that I can type on my desktop with a keyboard when one is available, and
continue the conversation on mobile when I leave my desk. SMS doesn't have
that, nor does WhatsApp, but I find it very valuable.

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jotm
Am I the only one who switched completely to email and cloud storage? Who uses
SMS anymore, email uses the data connection and you can upload/download
gigabytes on GDrive/OneDrive (former SkyDrive, Microsoft is at it again).

I just see WhatsApp's value dropping as more and more people switch to actual
smartphones...

~~~
kevincrane
> Who uses SMS anymore

Me and every single person I know...

~~~
jotm
Why would I use Whatsapp instead of an email app like Gmail, for example?

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enscr
To write it off 3 years later?

Skype used to work well until ebay interrupted it. Now with MS, the bloated UI
takes forever to load and I can't login for 3-4 minutes. If whatsapp can start
in a snap on a mobile device and use so little background resource, why can't
skype achieve that. The users will come automatically if you have a compelling
product.

~~~
uladzislau
I'd add missing missing requests and messages which is totally unacceptable.

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peterclary
If you'd have bought WhatsApp, you'd have bought WhatsApp.

------
notastartup
so....how do I get the big three companies bidding on my company? Do I email
Zuckerburg and say,

"Yo, Larry Page just bid X,XXX,XXX,XXX what's your offer, hurry cuz I might
take it"

and then go to Larry Page and say

"Hi, Zuckerburg just bid XX,XXX,XXX,XXX what's your final offer, hurry cuz I
might take it"

Sit back and watch valuation go up?

