> also had to make a lot of promises. Some of those promises were even enshrined in the acquisition agreement: If Facebook imposed “monetization initiatives” like advertising onto WhatsApp, its founders’ shares would vest immediately, and they could leave without suffering any kind of financial penalty.
That's pretty interesting. They foresaw it of course and put a claim in the contract about it. Though when trying to trigger it FB fought back so Acton left the money on the table.
> Acton gave up some $900 million; Koum gave up about $400 million. You need to be really unhappy at work if you’re willing to quit a job that’s effectively paying you some $60 million per month, and from which you basically can’t be fired.
A new type of "fuck you" money VC style - you can have your dirty stock options I am out of here.
> or was he talked into breaking his promise by Sandberg and other executives looking covetously at WhatsApp’s unmonetized userbase? Either way, he has clearly failed a key leadership test.
The leaders tend to aggregate around them minions who are an exaggerated version of themselves. If they are liars they will surround themselves over time with even bigger liars. If they are narcissists they'll end up with minions who are narcissists. It's mostly natural selection. Well it happened in this case, there was a clash and those who don't agree leave. Over enough years it "distills" the company culture into whatever characteristics the top leaders have.
Why would someone walk away from over $100M just because they don't want to pay a legal team under $1M to argue their case? Seems like they just didn't care.
Consider this situation from the perspective of a biological person. A biological person has resource limitations in terms of effort, concentration and resources. When you're already worth say 10bn each, your primary limitation is time and effort, which doesn't scale. Do you really want to squander your personal time and effort on increasing your net worth by 5%? Not likely. You have the next horizon to conquer and you have plenty of cash.
Let Zuckerberg have his measly $750m, which means F all to either of you and get on with your next project.
This is entirely a pragmatic and reasonable decision on the part of the whatsapp founders.
It's not obvious that they would have won. Zuckerberg hasn't actually forced ads into WhatsApp yet, and WhatsApp remains ad-free today. He just (allegedly, according to anonymous sources) is suggesting that WhatsApp leadership should do it.
Then what's the problem? They don't like their co-workers so they quit their job. Unless Facebook staffers were effectively creating a hostile environment specifically to lusb out the WA guys to claw back their unvested equity. Which frankly seems compatible with Zuck's style, even if it's more of his buddy Zynga-CEO's trademark style.
Maybe the 'bergs promised some sort of horrible countersuit, aimed at clawing back the billions? Some sort of breach of contract or duties to shareholders or something? Even if the claims were obvious bullshit, why take a 30% chance of losing one's ginormous fortune? In fact the whole thing could have been a way of extracting some further, more-recently-dated agreement that FB and the WA founders are square...
Right, I'm sure that the WhatsApp founders thought that Facebook paid $19 billion for a company just to keep charging $1 per year with no ads and no data collection.
I'm assuming here that your comment is sarcasm. But in fact it's not entirely wrong headed. At the time of the purchase WhatsApp had clear momentum with 500m users paying $1 per year, say. The standard business assessment is that a business is worth 10x earnings so 5bn. But that's assuming WhatsApp was static in users but it, in fact, was on a growth curve. So $5bn was the low end of valuation, the top end would include all 7bn humans on earth. That would be stretch at $70bn for WhatsApp. $22bn in the end was pretty reasonable given the circumstances.
Your analysis assumes that WhatsApp cost $0 to maintain and grow and that 2-day old infants are using WhatsApp, and ignores the fact that the vast majority of WhatsApp users at the time of acquisition had not even paid the $1.
True enough. But the factors you mention are round off errors and "not material" as a steely eyed accountant would say. At the time of the buyout the "conversion ratio" of those that paid the $1 after a year would have been well established.
It's more than that -- in many of their biggest markets (e.g. India) they waived the $1 fee entirely so all of their users there were free. So you can't really figure out the conversion ratio because it was never tried.
What did the contract say? The only contract I saw in the original story noted that if adds were forced on them some people could leave with more stock..... that wouldn't have prevented anything.
Why is it Zuck's fault if he lets Sandberg monetize WhatsApp, but it wasn't Acton and Koum's fault for letting Zuck do it?
How can it be Facebook's management's fault if they let 3rd party apps abuse FB user data, but not WhatsApp managements fault for letting Facebook do the same? Acton and Koum sold out their users for a huge payday, and now they are so rich that they can walk away from a few hundred million dollars to "buy an indulgent" for their immortal souls.
I'd love to move out of Whatsapp, but in Mexico and Spain literally everyone is using it.
The other day I ordered take-out exclusively from Whatsapp. The company where I work recently implemented user support using Whatsapp. I buy coffee from a nearby roaster and he informs me the day before roasting so that I can get fresh coffee. I also know lots of parents that communicate with schools and create groups with other parents.
Not to mention it will only become more entrenched since carriers at least here in Mexico don't count Whatsapp/Facebook towards your data usage, which is pretty awful if you were ever hoping for a competitor to emerge.
Same for some SEA countries (Malaysia & Singapore), whatsapp (some includes other popular messaging apps such as WeChat, FB messenger) messages/calls does not count toward your data usage for most telcos and it is the main way people communicate, Whatsapp basically replaced SMS there when it was launched.
I had the same problem recently. After failing to get my friends and wife to use Keybase (they tried it, but it just doesn't work on mobile beyond basic text chats with no image pasting).
Requirements were: secure, iOS/Android/Mac/Linux/Windows, multi-person chats, and multiple simultaneous/alternating device support (that means chat history needs to propagate to my phones and computers).
iMessage was not considered (because it supports only iOS & macOS) and WhatsApp was not considered (because Facebook).
After looking at Signal, Telegram, Keybase, and Wire, we ended up using Wire. It's not perfect by a long shot, but it is better than the others we tested and AFAICT better than any solution currently available.
But I had never heard of it until I really started looking around.
Hi! Okay sure, I will tell you! I am rooting for you guys.
1. Presence/active device detection.
Often I am sitting right at my computer actively chatting with somebody, and yet my phone sitting on the desk right next to it is blowing up with notifications of the same messages I am replying to.
2. Too many features.
I am constantly accidentally activating features like snapchat-style disappearing messages and weird alien voice effects. Cool if you have them enabled by default but I would like settings to turn OFF the many features that I literally never use (particularly on mobile where there are both small screens and more features, hence more icons).
3. 10-device limit.
I know it sounds crazy but I have 2 phones and a few tablets and computers at work and home and I often have to delete a device to use the one I am at now. (20 devices would work for me; even 15 probably would.)
4. Initial log in / start up performance.
I know it's hard with the huge photos and encryption. But sometimes i get a notification on my watch that my wife just said XXXXX and I want to respond RIGHT NOW on my computer. But it takes like 8 seconds on an iMac Pro to get to the active/ready state after booting the app. (I tend to just leave it open for this reason, but sometimes have to reboot or whatever and it is not). I would prefer it started up and let me send IMMEDIATELY even if I had to wait for it to load/decrypt the chat histories.
Those are the main ones off the top of my head. It is a great product, though, and I appreciate your efforts!
They bought the company, it's facebook's to do with as they wish.
There was talk about independence but no indication that facebook was paying bazillions and were going to leave them alone for long. The founders even knew it enough to note the possibility of having ads forced on them in their contracts.
I'm no fan of facebook, but justification is ... it is their product.
> What’s more, WhatsApp’s two founders both left hundreds of millions of dollars on the table, so keen were they to leave Facebook’s ad-friendly walls. (It turns out that their contractual right to being paid out in full would require them to sue for the money, and, according to the Journal, neither of them had the appetite for that.)
Whatsapp was bad to begin with. Some non standard XMPP without federation and with very poor security. Irresponsible developers who created it, shouldn't have started such project.
https://news.ycombinator.com/item?id=17238241