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How Jan Koum Steered WhatsApp Into $16B Facebook Deal

Posted by timothy on from the ok-today-I-can-supersize-it dept.

First time accepted submitter paulbes writes "Jan Koum picked a meaningful spot to sign the $19 billion deal to sell his company WhatsApp to Facebook [Wednesday]. Koum, cofounder Brian Acton and venture capitalist Jim Goetz of Sequoia drove a few blocks from WhatsApp's discreet headquarters in Mountain View to a disused white building across the railroad tracks, the former North County Social Services office where Koum, 37, once stood in line to collect food stamps. That's where the three of them inked the agreement to sell their messaging phenom –which brought in a minuscule $20 million in revenue last year — to the world's largest social network." Forbes overstates the apparent selling price by a few billion dollars; big numbers, either way. [Update: 02/20 13:51 GMT by T : The $19 billion makes sense, if you include retention bonuses in the form of restricted stock units.] Another reader points out the interesting fact that "Acton — himself a former Apple engineer — applied for jobs at both Twitter and Facebook way before WhatsApp became a wildly popular mobile app. Both times he was rejected."

84 of 136 comments (clear)

  1. And then posted .. by OzPeter · · Score: 1

    Take that SnapChat!

    --
    I am Slashdot. Are you Slashdot as well?
    1. Re:And then posted .. by cayenne8 · · Score: 4, Insightful

      Am I the only person that had never heard of "WhatsApp" prior to news of this buyout?

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
    2. Re:And then posted .. by Anonymous Coward · · Score: 1

      Apparently you're not one of the 400M global users certainly. However, I think the keyword there is "global"; it seems to be pretty prevalent in non-Western countries from what I can gather.

    3. Re:And then posted .. by Frederic54 · · Score: 1

      No don't worry, I have no clue what it is too, and paying 19B for something like this seems nonsense?!?

      --
      "Science will win because it works." - Stephen Hawking
    4. Re:And then posted .. by phantomfive · · Score: 1

      It's super popular in India.

      --
      "First they came for the slanderers and i said nothing."
    5. Re:And then posted .. by JeffOwl · · Score: 3, Funny

      However, I think the keyword there is "global"; it seems to be pretty prevalent in non-Western countries from what I can gather.

      Yes, it's the David Hasselhoff of messaging apps

    6. Re:And then posted .. by rasmusbr · · Score: 1

      Apparently you're not one of the 400M global users certainly. However, I think the keyword there is "global"; it seems to be pretty prevalent in non-Western countries from what I can gather.

      Yep, and presumably among teenagers and children in western countries, the ones who presumably hold the dagger that could kill any of the incumbent social networks.

    7. Re:And then posted .. by jsepeta · · Score: 1

      my daughter and her friends despise facebook. now they'll need to find a new messaging app.

      as for me, i dumped instagram after the facebook sale. zuckerberg is an ass.

      --
      Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
  2. I hear that by Chrisq · · Score: 4, Funny

    I hear that facebook also offered $19 for slashdot beta.

    1. Re:I hear that by Anonymous Coward · · Score: 1

      To be fair, they really just needed quarters for the meter.

    2. Re:I hear that by TWX · · Score: 1

      You sure that it wasn't $0.19?

      --
      Do not look into laser with remaining eye.
    3. Re:I hear that by Anonymous Coward · · Score: 1

      0.19 Dogecoin

    4. Re:I hear that by TWX · · Score: 1

      Wow... couldn't pull one over on you, could I?

      --
      Do not look into laser with remaining eye.
  3. Rags to riches... by TWX · · Score: 5, Interesting

    ...does happen, that isn't in of itself actually a surprise, especially when one considers that Mr. Acton had an education and a career that requires either an education or above-average ability (for the sum of humans total).

    The thing that I find disappointing is how the nature of overvaluation in emerging software markets (ie, any software or service that isn't showing a profit) is reaching unsupportable levels. What I want to know is, have the users of these sites started truly fundamentally changing how they behave in terms of being led down certain directions as a result of their use of software-based services like Facebook, and if so will this reflect their purchasing habits? If the answer to the second part is no, then this is just a huge bubble as there is no real inherent value in social media from an advertiser's point of view. Given that advertising is the primary means of driving revenue these days, that spells disaster.

    There was a documentary on PBS the other night about the nature of social media. It first started with the co-opting of youth culture, repackaging it, and reselling it back in the form of MTV in the early noughties, and contrasted to today, where people strive for "Likes" and "subscribers". Some individuals have made personal money successfully, but it doesn't seem to translate well into the corporate profit engine well. Persons and small businesses are unlikely to afford to buy advertising through social media, so I don't see how Facebook et al are going to profit substantially from this bottom-up form of media.

    And I expect the bubble to burst. Both for individual companies (Facebook replaced MySpace, something will replace Facebook) and for the industry as a whole.

    --
    Do not look into laser with remaining eye.
    1. Re:Rags to riches... by alen · · Score: 1

      small businesses are the ones who should be buying ads through social media
      regional TV is still too expensive for a small business like a restaurant or a club
      you buy followers on twitter and facebook and update the streams for your fans

    2. Re:Rags to riches... by Bill+Dimm · · Score: 2

      it doesn't seem to translate well into the corporate profit engine well

      Advertising dollars spent on Facebook may be detrimental for companies buying "likes" through Facebook (even directly, not 3rd party). When advertisers figure that out, Facebook is done.

    3. Re:Rags to riches... by JaredOfEuropa · · Score: 2

      The added value of social media and search engines to advertisers is targeted advertising. Not because these ads result in big changes in purchasing habits of the viewers, but because they allow my product to be offered to people who are potentially interested in it, as opposed to whomever happens to be watching. That makes advertising affordable, especially for small businesses.

      I couldn't afford an ad on national TV let alone something on an international medium. I might be able to afford one on local TV but it's unlikely to be cost effective for a niche product like mine. However advertising through Google has proven to be well worth the (small) price. These are new advertising euros that would otherwise not have been spent.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    4. Re:Rags to riches... by Reapy · · Score: 1, Insightful

      I like the part where they paint the guy as a food stamp collecting dude, but later in the article he 'lived off the 400,000 he had saved'. That is definitely not a poor person who has 400k laying around in bank accounts, at all.

    5. Re:Rags to riches... by TWX · · Score: 2

      On the other hand, buying TV or radio time in one's market is a guaranteed way of knowing that the money that you've spent is paying for something that's being properly implemented, as in locally. It's intuitive that a local affiliate station will only broadcast the ad in its geographic area. It's also fairly easy to confirm that one's ad is being played if one buys time during a given timeslot as one can simply listen to the radio or watch TV to confirm.

      Buying online advertising is less intuitive. The ad agency may say that the ad is being sent to this or that geographic area, but there's no obvious way for the customer-business to confirm independently. They're stuck relying on the self-reporting of the ad agency. They're also faced with adblocking software that might retrieve the ad but not display it, skewing the results.

      As the Frontline documentary said, it's much easier to confirm the success by bringing someone already-successful in to co-opt a bit of their success, to ride on the coat tails as it were. If you watch Jenna Marbles because you want to be like her or want ladies like her, if she mentions a club or venue or bar that she's hanging out at, you're likely to take notice of that. Some will add that organization to their subscriptions and may even patronize it because of it.

      The danger is that it starts switching from grass-roots to astroturfing. Look at the extreme press that the various big Comic Cons get, despite them not really being much about comics and really not having different atmospheres than older conventions and even SCA and renfaires have. It's a feeding-frenzy or a feedback loop, not because there's much to really offer, but because it's massively self-referential, and I have a feeling that it too, will pass. Too many seasons of ticket unavailability will start leaving people to look for other places, and eventually another thing will become hot, and they'll stop selling-out memberships as that new thing co-opts.

      --
      Do not look into laser with remaining eye.
    6. Re:Rags to riches... by TWX · · Score: 1

      At that level of money, it has nothing to do with education or technology, it's about people and knowing the right people and saying and doing the right things.

      Nope. One still has to have something to offer in order to command big money. There has to be some defining characteristic to set one apart. Otherwise there'd be a lot more rich sports players, a lot more rich musicians and rappers. Mr. Acton happened to have been in the right place and at the right time, and to also have had that special thing. Had he not had it to build what he built, no one would have given him a cent to buy-out the fruits of his labors.

      --
      Do not look into laser with remaining eye.
    7. Re:Rags to riches... by Tom · · Score: 1

      I wish for the bubble to burst, but I don't think it will.

      Here's a dark secret of the advertisement industry: Not only are we not the customers of Facebook, but its product, but just the purpose of the advertisement industry is not to sell the products of its customers - it is to sell its customers more advertisement.

      The main product of ad agencies are themselves - telling everyone that they need to advertise, and advertise more, and have you seen your competitors? you have to beat them...

      So I expect the bubble to continue, because a billion-dollar industry has an interest in it. Not because the companies buying ad space on Facebook really make a profit doing so, but because the ad agencies selling ad space on Facebook do.

      --
      Assorted stuff I do sometimes: Lemuria.org
    8. Re:Rags to riches... by gnick · · Score: 1

      ...have the users of these sites started truly fundamentally changing how they behave in terms of being led down certain directions as a result of their use of software-based services like Facebook, and if so will this reflect their purchasing habits?

      Yes. Even if 5% of FB users have used Candy Crush, and only 10% of those drop $.99 twice a month on "lollipop hammers" or some such, that's still $150M+/year - On an imaginary product with infinite free supply. And if targeted advertising was ineffective, then a lot of very successful companies & governments have wasted a lot of money on it spanning decades.

      Decades of repeated success strongly suggests that these companies have found an effective market strategy. That said, I do believe that FB is a wildly over-inflated bubble. WhatsApp even more so.

      --
      He's getting rather old, but he's a good mouse.
    9. Re:Rags to riches... by geekoid · · Score: 2

      When he was a child he and his mother need food stamps. He later worked at Yahoo, and others, and didn't need food stamps then.

      I like the part where you need to not think and just cherry pick so you can deal with the fact you will never have money or accomplish anything.

      Every one should take a lesson there. Live frugal and you can save a lot of money. There will always be toys to spend money on, no need to live on the edge of your income.

      --
      The Kruger Dunning explains most post on /. http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
  4. Worthwhile keeping in mind, by jenningsthecat · · Score: 1

    ...that the money for this transaction ultimately comes from all of us. We bought the products and services of the companies whose marketing and advertising rely on Facebook. And those of us who have FB accounts, (along with those of us who don't do our best to stop FB tracking us all over the Web), have made Facebook at least look like it's worth the money those companies hand over to it. That's how Facebook can pay almost a thousand years' of WhatApp's current revenue for the fledgling company.

    --
    'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
    1. Re:Worthwhile keeping in mind, by Gunboat_Diplomat · · Score: 2

      ...that the money for this transaction ultimately comes from all of us. We bought the products and services of the companies whose marketing and advertising rely on Facebook. And those of us who have FB accounts, (along with those of us who don't do our best to stop FB tracking us all over the Web), have made Facebook at least look like it's worth the money those companies hand over to it. That's how Facebook can pay almost a thousand years' of WhatApp's current revenue for the fledgling company.

      A large part of what Facebook is paying for is to not have their position threatened. A large part of what built Facebook was photo sharing, can't risk anyone steal that position from them, which is why they also bought Instagram. Seeing it as a $19B investment to safeguard their $170B valuation makes more sense than trying to find the value in current SnapChat business.

    2. Re:Worthwhile keeping in mind, by ledow · · Score: 1

      Sorry, but I've given Facebook precisely zip.

      My having an account is not going to turn into a guilt-trip to make me think I'm funding idiocy like this. Facebook isn't worth what its share prices say its worth, any more than WhatsApp is worth anything even APPROACHING a billion, let alone 19 of them. But it's not my fault.

      If someone is stupid enough to give Facebook / Whatsapp this kind of money, it's certainly not someone like me. If they are paying that to try to reach me, more fool them. If you don't notice, you'd be BETTER OFF giving everyone on Facebook, say, £100 and asking them to spend it on your mate's products. It's literally that bad.

      And trying to get even just my share of, say, $19bn out of my Facebook account will almost certainly end up in me terminating it. Try putting more than a few ads on the Facebook page and I'm off. As it is the "sponsored" updates are annoying me. You'll be lucky if Facebook's "income" from any one person is even pence, in terms of clicked ads etc., before you even count out costs they've incurred to Facebook.

      And I can state with quite a high degree of certainty that all of the companies that have given Facebook money - none of that has come from me. I've never clicked on an ad, let alone the bollocks Facebook ads that can't even be bothered to read my interests that I've taken the time to put on my Facebook account. If they've paid to spam me, I haven't even noticed and if I do notice, I'm off. It's that simple.

      But, actually, nobody has made me spend money with them by tapping into the information I provide Facebook at all. In fact, just the opposite. Spamming me for US-based VPS servers just because I have IT-related interest doesn't help a Brit like me at all - but Facebook gets so little other information from me (blocked referrers, et.c) that they have no way to monetise me anyway. They aren't driving me to Amazon to buy products or anything else. I have my family, some photos, a few companies that *I'VE* worked for, and that's about it. I'm infinitely more likely to complain about a company than praise them, so they aren't even getting "social" referrals.

      If people are stupid enough to value WhatsApp / Facebook at those amounts, that's their problem - but there is no path, direct or indirect, from the money I spend on Facebook (zero) or WhatsApp (a single £0.69 / annum transaction to buy the app and I haven't even done that, my girlfriend has, to talk with her mates back home) or their affiliates and adverts (zero) to justify any such valuation whatsoever.

      Sorry, but you need 27 billion "user-years" of subscriptions to make WhatsApp worth what this says it is. That's everyone on the entire planet buying it religiously for the next three years, and also assuming there is zero cost to provide such service levels at all. It's utter nonsense, and several orders of magnitude out - there are 320m daily active users of WhatsApp. Most of those are probably on the year's free subscription.

      Let's call it even 500m people buying the app this year and it's STILL orders of magnitude out. And not even close to what will happen in 5-10 years. And not when Facebook attempt to "monetise" it further.

      Sorry, but Facebook makes ZERO from me. If idiots want to pay them money in order to try to get ME to spend money, then well done Facebook. They have truly found a perfect business. But nobody's done that really, and certainly won't get their money's worth even if they did, and that's why Facebook isn't worth what these people claim it to be worth.

      Ten-fifteen years ago there was a site called FriendsReunited in the UK. It's a "find your old classmates" kind of site. At its height it was valued and sold for prices in the hundreds of millions (at one point to ITV, a huge broadcaster). It was bigger than Facebook and the only go-to site for that kind of thing. Then it was sold for £5m just a few years later. Now it's virtually dead (because Facebook just walked in and su

    3. Re:Worthwhile keeping in mind, by geekoid · · Score: 1

      IN 2103 Facebook has nearly 8 billion in revenue and about 2.5 billion in operation income..
      In one year it's profit went from 60 million to 580 million.

      I'm sorry, you were saying Facebook Doesn't make any money?

      IF you use faebook, then you are making facebook money.
      Not that it's right or wrong to use facebook.

      --
      The Kruger Dunning explains most post on /. http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
    4. Re:Worthwhile keeping in mind, by ledow · · Score: 1

      A couple of dollars, per quarter, per user. From advertisting. Sure, there are users giving money to Facebook directly but - NOT ME. And not most people, obviously.

      http://venturebeat.com/2013/10...

      The money comes from advertisers. Do those advertisers make that money from users? Pretty much no. They might think that, but they aren't. We're not giving advertiser's money, lots more money than we are directly pumping into Facebook by buying in-game currency etc.

      Someone else is. Businesses are. Whether they get a return on that is, like Google ad revenue, extremely hard to determine but incredibly unlikely for the majority of them.

      And, like I say, if that's how they are using me to make money - I don't click on adverts, don't let ad referrals propagate back to sellers I was using anyway, and if they push too much (no way they are showing the average user enough adverts to justify a dollar from each of them per quarter) they will kill the business flat.

      In case you haven't noticed - most places that spend money on advertising just don't see it back in increased revenue at all. Groupon can show you that. And almost every Facebook ad I see is small-fry Google-ad territory, where I doubt they even had enough free money to advertise in the first place, not "Coke" or "Pepsi" or "Microsoft" doing it.

      *I'm* not paying for Facebook at all. Stupid advertisers that won't see their money back - ever - are. It doesn't mean that's not how Google are funded either. But the advertisers that have paid to get to me, and the things I do on Facebook, generate no money whatsoever - and certainly not once you count profit instead of revenue (income). Facebook is not free to run. And for sure I'm costing it more than a dollar per quarter.

    5. Re:Worthwhile keeping in mind, by 3.5+stripes · · Score: 1

      They don't make money from you, they make money from selling your data to other companies... that's why user numbers are important!

      --


      He tried to kill me with a forklift!
  5. Web Bubble 2.0 by Anonymous Coward · · Score: 5, Insightful

    Nineteen billion for a glorified instant messenger.

    1. Re:Web Bubble 2.0 by codeButcher · · Score: 3, Insightful

      Nineteen billion for a glorified instant messenger.

      well, you have to admit that it is an instant messenger that sends the address book of the user to the company's servers for further "use" (spamming, so far, so far we know). IMs did not use to do that. Fits well with FB's business model. The service being delivered is not communication. It is advertising.

      --
      Free, as in your money being freed from the confines of your account.
    2. Re:Web Bubble 2.0 by alen · · Score: 1

      facebook also has a IM
      how would it cost them to market it until they get over 450 million users? or just buy a company

    3. Re:Web Bubble 2.0 by JaredOfEuropa · · Score: 2

      That was exactly the motivation behind the offer for SnapChat: billions of $ for a service that could be replicated with little effort on Facebook's existing platforms. It was not the service or the tech they were after, but the users, and specifically the younger crowd. Same motivation behind Google's offer. It's the "eyeballs" of the 90s all over again.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
  6. Oh for fucks sake by musmax · · Score: 1

    Success is always attributed to the extraordinary skill and foresight of the winner: http://psychology.about.com/od.... Queue the endless blogs and Forbes' deep analysis heaping accolades on Jan and his demonstrable $16B greatness. Good on Jan for striking it lucky, spare a thought for the thousands, just as worthy, that the dice did not favor, nothing more nothing less.

    1. Re:Oh for fucks sake by stenvar · · Score: 1

      Success is always attributed to the extraordinary skill and foresight of the winner

      And that's a correct thing to do in business. With few exceptions, extraordinary skill and foresight are necessary to win big in business, but they are not sufficient; the kind of skills that matter, however, may not be what you personally value or recognize.

      Good on Jan for striking it lucky, spare a thought for the thousands, just as worthy, that the dice did not favor, nothing more nothing less.

      Getting $19 billion for the company involves a great deal of luck, but he is seeing only a fraction of it. But whatever he is getting, his skills pretty much assured him wealth if he made the right choices.

      Achieving a net worth of several million dollars does not require luck, and it usually doesn't even require extraordinary skills.

    2. Re:Oh for fucks sake by D-Fly · · Score: 1

      As you say, cue the fawning Forbes ''analysis.''

      The fact that Jan was on food stamps just a couple of years ago and now is worth something like 10 billion dollars on paper should say...something to all of the right wing assholes who hate on the poor for being shiftless losers, and who try to destroy the tiny little safety nets this country has left for people on the edge of starvation or homelessness.

      --
      \
  7. Not a bad deal for Facebook by rjstanford · · Score: 4, Insightful

    Facebook is going mobile - as are many (most) other players. This is one of the few mobile messaging networks that has a reach big enough to pull users away from Facebook. $19B is a reasonableamount of money to spend on defense to make a network that - internationally - is bigger than Twitter disappear as a risk.

    Its not the revenue today, its the customer base (7% of the world population are regular users and its still growing rapidly). We're not used to international phenomenons like this, so of course the numbers look huge as absolutes. $38/customer is still a lot for a pure acquisition, so if they hadn't become large enough to be a credible threat they'd likely never have seen that much, but they did... and the rest is history.

    --
    You're special forces then? That's great! I just love your olympics!
    1. Re:Not a bad deal for Facebook by Anonymous Coward · · Score: 1

      BitTorrent is bigger than Twitter. Twitter isn't that big, it's just mostly visible to the public.

    2. Re:Not a bad deal for Facebook by rjstanford · · Score: 1

      BitTorrent is bigger than Twitter. Twitter isn't that big, it's just mostly visible to the public.

      Having 10-11% of the living population of the entire human race using your platform on a regular basis (best guess removing bots, etc) "isn't that big" to you?

      What, pray tell, would be?

      --
      You're special forces then? That's great! I just love your olympics!
    3. Re:Not a bad deal for Facebook by DogDude · · Score: 1

      $19B is a reasonableamount of money to spend on defense to make a network that - internationally - is bigger than Twitter disappear as a risk.

      It's so big that nobody I know has ever heard of it. That's pretty amazing.

      --
      I don't respond to AC's.
    4. Re:Not a bad deal for Facebook by DerekLyons · · Score: 1

      Its not the revenue today, its the customer base (7% of the world population are regular users and its still growing rapidly). We're not used to thinking like businessmen, thinking strategically, or planning ahead

      There, FTFY.
       
      And really, that's the issue in a lot of comments on business topics here on Slashdot - when it come to business, most of the denizens making comments are the equivalent of virgin celibate priests writing sex advice columns.

  8. $19 billion not for WhatsApp by Anonymous Coward · · Score: 5, Insightful

    They paid this amount for 450+ million users database from around the world their phone numbers, IMEI, MAC addresses, contact lists, ..... list goes on.

    1. Re:$19 billion not for WhatsApp by RivenAleem · · Score: 1

      What happens to people who used WhatsApp so they could IM on their phone, without FB getting their phone number? How do I as a user prevent FB from getting my phone number now? Is it too late to delete the app from my phone and request record of it deleted from their service?

      Does it matter because any of my friends have my phone number and are using WhatsApp and thus FB will get it from them if not from me?

      Has that ship sailed?

    2. Re:$19 billion not for WhatsApp by D-Fly · · Score: 1

      I deleted my Whatsapp account from my phone and my wife's as soon as this news broke for this precise reason. I don't want Facebook having my telephone number, IMEI, router information, etc.

      But you make the very good point that all of my 2 dozen or so Whatsapp contacts that have my phone number will be giving it to Facebook anyway. As we are all well aware, Facebook's backend is VERY good at identifying who you are through its analysis of social networks [viz. the 'People You May Know' feature], so they will likely be able to fill in phone numbers for basically all of their users using Whatsapp's database, even if those users do not actually have a Whatsapp account.

      When I lived in Egypt some years ago, before the fall of Mubarak, I used to hang out with quite a few anti-regime activist types. They would organize pathetic little demonstrations, frequently via Facebook. And every once in a while, if they were organizing something that the regime really didn't want them to do (demonstrating at the Interior Ministry or something), the government would come in and efficiently round up everyone who had checked in or whatever via Facebook, before the demo got started. It was pretty clear that they had penetrated the online social networks pretty thoroughly, either with or without help from Menlo Park. I've had a very healthy skepticism of Facebook ever since.

      It's funny how when we were kids (and for generations before), the bugbear was the all-encompassing government surveillance state. And it has arrived, but it crept in through the ethernet port, with our own little voluntary checkmarks next to the User Agreement. And it came through private companies like Facebook and Google.

      The ship has sailed.

      --
      \
  9. The way is shut. by Anonymous Coward · · Score: 1

    The way is shut.

    It was made by those who are Dead,
    and the Dead keep it, until the time comes.

    The way is shut.

  10. why do people use WhatsApp? by stenvar · · Score: 2

    I don't get it. Even my shitty low-end cellular plan has unlimited texting, and WhatsApp doesn't seem to be doing much else. I can't even take the WhatsApp account with me when I change phone numbers. And WhatsApp is a big, bloated application.

    Why do people actually use WhatsApp?

    1. Re:why do people use WhatsApp? by kaiser423 · · Score: 1

      Free international texting. In some areas of the globe it's use is near universal, from grandmas to the little kids. In the Middle East and parts of Africa and Asia, a WhatsApp account is literally on over 75% of smart phones.

    2. Re:why do people use WhatsApp? by Pope · · Score: 3

      Not everyone has your texting plan. WhatsApp does group chats very well. That's enough for people to find it useful.

      --
      It doesn't mean much now, it's built for the future.
    3. Re:why do people use WhatsApp? by rgbscan · · Score: 1

      Its just an instant messenger. Not everyone has unlimited, or international texting. Using the data plan often makes more sense.

    4. Re:why do people use WhatsApp? by baka_toroi · · Score: 2

      You don't get unlimited texting in every country.

    5. Re:why do people use WhatsApp? by cayenne8 · · Score: 1

      Free international texting. In some areas of the globe it's use is near universal, from grandmas to the little kids. In the Middle East and parts of Africa and Asia, a WhatsApp account is literally on over 75% of smart phones.

      Interesting, I'd never heard of the app till this story broke about the large $$$ sale.

      So, is this more of a non-US popular app, or is it popular in parts of the US too?

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
    6. Re: why do people use WhatsApp? by stenvar · · Score: 1

      Those of us who actually do leave our little towns are generally smart enough to figure out that there are plenty of better ways to do free international messaging.

    7. Re:why do people use WhatsApp? by Ecuador · · Score: 1

      I have unlimited texting in the UK, but most of my friends are in various countries. I don't like IMs, but when a friend suggested that there is an IM that requires no signup and shows you directly which of your phone contacts are on, I tried it out. So, it works well and you can post pictures and sound into the conversation, hence much better than SMS.

      --
      Violence is the last refuge of the incompetent. Polar Scope Align for iOS
    8. Re:why do people use WhatsApp? by Control-Z · · Score: 1

      I use it to keep in touch with a group of gaming friends, you send one message and everyone in the group gets it. Sort of like a forum, but you can create groups any time you like, invite anyone you like to them, and there is no moderation.

    9. Re:why do people use WhatsApp? by mgcarley · · Score: 1

      I always thought of it like a BBM replacement (which is why I don't get the reason for BBM on Android/iOS) but also

      1. Lots of countries don't have unlimited texting
      2. Free international texting
      3. Texts longer than 160 characters
      4. Group texting (we use it to send status updates to subscribers when we have network outages)
      5. Easy export of message history
      6. Confirmed receipt & reading of messages ...and probably something else.

      As far as taking the account with you when you change phone numbers... I'd call that a feature, not a bug. Presumably if I was changing my phone number, I'd be doing it for a reason, although it would be nice to have the option to register properly and have it tied to a username/password if I wanted to.

      --
      Founder & COO, Hayai India (hayai.in) / USA (hayaibroadband.com) // t: @mgcarley
    10. Re:why do people use WhatsApp? by stenvar · · Score: 1

      I always thought of it like a BBM replacement (which is why I don't get the reason for BBM on Android/iOS) but also

      Of course, Skype, Hangouts, and lots of other apps satisfy all those requirements.

      As far as taking the account with you when you change phone numbers...

      Gosh, yeah, like when you move to a different country or switch to another carrier and can't take your number with you.

    11. Re:why do people use WhatsApp? by mgcarley · · Score: 1

      I always thought of it like a BBM replacement (which is why I don't get the reason for BBM on Android/iOS) but also

      Of course, Skype, Hangouts, and lots of other apps satisfy all those requirements.

      As far as taking the account with you when you change phone numbers...

      Gosh, yeah, like when you move to a different country or switch to another carrier and can't take your number with you.

      As someone who moves countries on a fairly regular basis (7-ish times in 10-ish years), I understand that argument better than most, however, for the majority of people that would be a non issue, hence my expression of desiring the option for a username/password to link the account(s) together and/or keep the history etc.

      As for simply moving carrier, number portability is available in many countries - not knowing which country you're from, however, I can't say for certain if it's an option for you.

      As for Skype/Hangouts/etc that's all good and well for those with smartphones, but in a country like India for example, most people don't have smartphones yet whatsapp can still run on some fairly basic hardware and fairly reliably on 2G whereas those options require 3G**

      (**by "requires", I mean, in order for it to work //well// - Skype does work on a 2G network, but it is worse than awful, and hangouts is slow as soggy shit on low-end Androids -- not everyone has an S4, you know).

      --
      Founder & COO, Hayai India (hayai.in) / USA (hayaibroadband.com) // t: @mgcarley
    12. Re:why do people use WhatsApp? by stenvar · · Score: 1

      As for simply moving carrier, number portability is available in many countries - not knowing which country you're from, however, I can't say for certain if it's an option for you.

      Well, it certainly isn't an option when I want to use messaging from a tablet that happens not to have cellular. Whatever, there really is no advantage to not being able to run the messenger app on a tablet or wifi only device or new carrier or whatever.

      As for Skype/Hangouts/etc that's all good and well for those with smartphones, but in a country like India for example, most people don't have smartphones yet whatsapp can still run on some fairly basic hardware and fairly reliably on 2G whereas those options require 3G**

      I use Skype and Hangouts text messaging regularly on an S2 with 2G, no problems. And WhatsApp is pretty bloated itself.

  11. It's Pets.com all over again by goombah99 · · Score: 3, Insightful

    During the Holland Tulip bubble, tulips became worth enormous amounts and some, like a black tulip, were exceedingly. Reportedly, the owner of a black tulip bought what he believed was the only other black tulip in existence for a prodigious sum, and then crushed it with his foot. "HaHa! Now I have the only one!" (only in Danish).

    whats.app had absolutely no intellectual property and it would take less than 1 million dollars to produce a polished work-alike. All the Facebook bought was it's customer list, nearly all of which probably already use facebook.

    The tulip age has returned again. Pets.com zombies walk the earth.

    --
    Some drink at the fountain of knowledge. Others just gargle.
    1. Re:It's Pets.com all over again by josgeluk · · Score: 2

      "HaHa! Now I have the only one!" (only in Danish).

      Strange. Why would he have spoken Danish?

    2. Re:It's Pets.com all over again by Chrisq · · Score: 4, Funny

      "HaHa! Now I have the only one!" (only in Danish).

      Strange. Why would he have spoken Danish?

      He didn't want the Dutch to know he was gloating!

    3. Re:It's Pets.com all over again by jittles · · Score: 2

      During the Holland Tulip bubble, tulips became worth enormous amounts and some, like a black tulip, were exceedingly. Reportedly, the owner of a black tulip bought what he believed was the only other black tulip in existence for a prodigious sum, and then crushed it with his foot. "HaHa! Now I have the only one!" (only in Danish).

      whats.app had absolutely no intellectual property and it would take less than 1 million dollars to produce a polished work-alike. All the Facebook bought was it's customer list, nearly all of which probably already use facebook.

      The tulip age has returned again. Pets.com zombies walk the earth.

      Facebook did not buy the customer list. They bought the chat history of millions of people. They are going to mine those chat histories and use those to expand the dossiers they have on their users. Also WhatsApp is popular in a lot of countries and markets where Facebook adoption is somewhat low.

    4. Re:It's Pets.com all over again by ultranova · · Score: 1

      whats.app had absolutely no intellectual property and it would take less than 1 million dollars to produce a polished work-alike. All the Facebook bought was it's customer list, nearly all of which probably already use facebook.

      No, what Facebook bought was a lack of a competitor. Facebook is, at the core, a wiretapped communication medium that sells analyses of the aggregate wiretapped data. Every alternative communication channel competes with them.

      --

      Forget magic. Any technology distinguishable from divine power is insufficiently advanced.

    5. Re:It's Pets.com all over again by timeOday · · Score: 1

      75% of the $19BN is in facebook stock, so it's more like trading some tulips for some other tulips.

    6. Re:It's Pets.com all over again by goombah99 · · Score: 1

      75% of the $19BN is in facebook stock, so it's more like trading some tulips for some other tulips.

      True from the point of view of whats.app. But that facebook stock was bought by investors using actual money and with the shares at a 100:1 P/E ratio, they probably are hoping not to spend money wisely.

      --
      Some drink at the fountain of knowledge. Others just gargle.
  12. dumb selection bias by Tom · · Score: 3, Insightful

    I can't hear the "he started out poor" line anymore.

    Yes, one in a million poor people make it. So what?

    --
    Assorted stuff I do sometimes: Lemuria.org
    1. Re:dumb selection bias by phantomfive · · Score: 1

      I think it's impressive because he overcame the odds. Compare that to Zuckerberg...........

      --
      "First they came for the slanderers and i said nothing."
    2. Re:dumb selection bias by Tom · · Score: 1

      Again, "the odds" aren't as unlikely as you think, given how large the world is. In the words of Tim Minchin: One-in-a-million things happen all the time.

      --
      Assorted stuff I do sometimes: Lemuria.org
    3. Re:dumb selection bias by dubbreak · · Score: 3, Interesting

      Overcame what odds? His parents are/were a dentist and a psychiatrist. That makes his parent's household income damn near the 1% (definitely 6 figures probably at least 200K/year which would be top 5%). I.e. his family was well off.

      Yes he makes a ton more than his parents, but he's still the same income class. His parents were in the top quintile and so is he. He's just in a richer sub-segment of rich. If he was born middle class or lower it would be overcoming odds (lowest quintile has something like 4% chance of getting into upper or top iirc). Most people end up in the same income class as their parents. There is very little upward mobility and also very little downward for the rich.

      --
      "If you are going through hell, keep going." - Winston Churchill
    4. Re:dumb selection bias by phantomfive · · Score: 1

      Oh yeah, that's not impressive. I should think more before posting.

      --
      "First they came for the slanderers and i said nothing."
  13. Signed the deal in food stamp building by SpankiMonki · · Score: 1

    ...then told the begger on the sidwalk to "get a job" as he left.

  14. Re:Terrible trend by baka_toroi · · Score: 1

    I agree. It's so fucking ridiculous I have to use my tiny and shitty touchscreen when I have a full-sized keyboard in front of me.

    I ended up using a keyboard server (through wi-fi) in order to type on my PC.

  15. Re:Overpriced? by rjstanford · · Score: 2

    And yet you often see very large parcels of empty land going for millions of dollars. Why? Because many developers understand that its not necessarily the current income that a property produces, but its income potential that you're buying. Sure, there's a discount for buying "potential" rather than "actual" earnings... but an empty tract of land is far from worthless, even if its bringing in less in revenue (cows/towers/etc) than its costing in taxes.

    That's what we have with WhatsApp - one of the largest, most attractive "tracts of land" on the internet, currently making little to no revenue. That doesn't mean it never will.

    --
    You're special forces then? That's great! I just love your olympics!
  16. Interesting hiring prejudice? by FilmedInNoir · · Score: 1

    > Another reader points out the interesting fact that "Acton — himself a former Apple engineer — applied for jobs at both Twitter and Facebook way before WhatsApp > became a wildly popular mobile app. Both times he was rejected." Maybe because Acton is 42.

    --
    Sig. Sig. Sputnik
  17. Re:Overpriced? by geekoid · · Score: 1

    Do you have the phone contact info for 450 million people? no?

    --
    The Kruger Dunning explains most post on /. http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
  18. Re:Overpriced? by MellowBob · · Score: 1

    True, but this is at least partially developed and Facebook isn't creating something completely new, although integrating the technology into FB might be the "developing". This might be more like the 10 store strip mall being turned into the Mall of America. FB is paying the full price for Mall of America just to get the revenue of a family run property.

    I don't see how they can increase the revenue 100x or more (using the real estate metaphor) as I'm guessing the data mining from that would overlap their current business. My current ability is only getting 10-20x on CD, DVD, and toys; and that's why they're the media empire billionaires.

  19. I use Whatsapp... by bayankaran · · Score: 1

    I use Whatsapp. Its useful - especially when you don't have to block ads.
    Facebook gets an address book and can mine whatever the user types into Whatsapp to generate sophisticated profiles of their users. At some stage your profile will be sharper than your friends/relatives know about you, even you about yourself. This can be used for showing ads.
    Here is the issue...where will you show ads?
    Mobile has a serious real estate issue. A decent text ad - like the GMAIL ads - will not work as you cannot cram many characters into a small space. What will work is annoying flashy ads, which irritate everyone.
    Showing ads on websites...we are at a saturation point. And Facebook will have to compete with Google - the biggest ad agency in this planet.
    Whatsapp and Tumblr were seriously overpriced. I hope the founders will use some of the proceeds for altruistic causes, that's what the world needs...not more ads.

    --
    Tat Tvam Asi
  20. You couldn't be more wrong if you tried. by DerekLyons · · Score: 1

    whats.app had absolutely no intellectual property and it would take less than 1 million dollars to produce a polished work-alike.

    True. But what Facebook is paying for isn't the code. It's the userbase and all the data associated with them. It's a strong quasi-contender with a hefty presence in an overlapping market segment. (Etc... etc...) Replicating those is non-trivial at best. If you think it's so easy and cheap, have at it, I wish you all the luck in the world. But I won't invest the penny I picked up off the sidewalk yesterday in your business.

    Seriously, there's a lot more to technology businesses than the code and the hardware it runs on, and a lot more to running a business long term than just minding your own knitting. Facebook (and Google, and Amazon, and... a whole host of others) grasp that. Slashdot pretty much doesn't.

  21. Sold Out. by DarthVain · · Score: 2

    http://www.whatsapp.com/

    "Why we don't sell ads: Brian and I spent a combined 20 years at Yahoo! working hard to keep the site working. And yes, working hard to sell ads, because that's what Yahoo! did. It gathered data and it served pages and it sold ads. We watched Yahoo! get eclipsed in size by Google..."

    Here is what just happened. Using a free app with no ads, some people collected the phone numbers and address books of 450 million suckers. Then for 4 Billion plus some stock, they sold all that information to Facebook, who will in turn re-sell that information selectively based on your Facebook habits directly to advertisers at a premium rate. There is also a messenger app and a bit of tech to enhance the already existing Facebook messenger a bit.

    Part of me thinks the price was so high with stock simply to create a big buzz and get even more suckers to sign up, allowing them to reap more consumer information, etc...

    Have fun getting robocalls for the rest of your existence until you change your phone number.

  22. Re:stenvar by TangoMargarine · · Score: 1

    If everybody has apps and Internet on their phones, why not just email?

    --
    Unity? Screw that: XFCE. Slashdot Beta? Screw that: SoylentNews. Australis? Screw that: Pale Moon. UX developers DIAF
  23. Re:Overpriced? by TangoMargarine · · Score: 1

    If this WhatsApp thing already had 10% of the likely population penetration, explain to me how they could expand by 1000x.

    --
    Unity? Screw that: XFCE. Slashdot Beta? Screw that: SoylentNews. Australis? Screw that: Pale Moon. UX developers DIAF
  24. Big data is Big by AAhrerh · · Score: 1

    If you think data mining of billions+millions of user accounts is staggering, be aware that NSA already has most of the data that Facebook+Whatsapp has.

  25. Re:I've never heard of it either by HappyPsycho · · Score: 1

    A single 140 character SM costs 10 cents here (Caribbean) on the low end, can get up to 40 cents without getting into roaming charges (6:1 exchange rate to US). Its also much more reliable than SMS by an extremely long margin (if a whatsapp has not gone through the sender knows it, if a SMS has not gone through not only does the sender not know when the message comes through it has the sender's timestamp which makes it look as if it had even to the receiver). I got some new years SMSes 2 days after.

    A pretty much unlimited length whatsapp is free, plus you can send media (Pictures, audio, video) which works much, much better than MMS. Even if you pay the couple US bucks a year for whatsapp (I think its $2, don't quote me on that though), depending on how much you use text messaging you will at least break even in 1-2 months. My RC group uses it to send announcements for events, after a few broadcasts we would easily have paid for whatsapp subscriptions for the entire group.

    I'll gladly concede Whatsapp is not perfect and has its annoying points (e.g. the device must have a SIM / phone number attached so most tablets are left out) but its still much, MUCH better than SMS ever will be.

  26. Re:Overpriced? by rjstanford · · Score: 1

    Because there's a difference between attracting users and monetizing them?

    --
    You're special forces then? That's great! I just love your olympics!