WhatsApp Founder Used Unchangable Airline Ticket To Pressure Facebook

McGruber writes "In a post on the Flyertalk website, WhatsApp founder Jan Koum provides another interesting detail about how he steered WhatsApp into a $16 billion deal with Facebook: 'we announced the deal with Facebook on wednesday after the market closed. during the process, we realized there was a chance we might not be able to get the deal wrapped up and signed on wednesday and it could delay. when the risk of the delay became real, i said: "if we don't get it done on wednesday, it probably wont get done. i have tickets on thursday to fly out to Barcelona which i bought with miles and they are not easily refundable or even possible to change. this has to be done by wednesday or else!!!"...and so one of the biggest deals in tech history had to be scheduled around my M&M award ticket."

Comments

Refund.

[o_ferguson]

Hey should give all 450 million customers a $1 refund for the service outage that happened after the deal went through.

Re:Refund.

[Anonymous Coward]

Thats a clever way to get users to tie billing info to their accounts and would add lots of value.

Really though?

[Anonymous Coward]

It's hard to think that FaceBook would take this threat seriously. It's a $10+ Billion deal. Throwing in some extra first class seats for a different day would be the equivalent of a give-a-penny-take-a-penny dish compared to this.

Re:Really though?

[K. S. Kyosuke]

Perhaps he simply bullshitted them into thinking that he was dumb enough to actually do it?

Re:Really though?

[Hognoxious]

At least he can afford a new keyboard now. One with a shift key, maybe.

Re:Really though?

[Idarubicin]

It's hard to think that FaceBook would take this threat seriously. It's a $10+ Billion deal. Throwing in some extra first class seats for a different day would be the equivalent of a give-a-penny-take-a-penny dish compared to this.

Indeed. I expect that the deal happened in spite of, and not because of, this 'threat'. Sure, Facebook's team would have had an "Oh shit!" moment--but it would have been "Oh shit, we're dealing with an unprofessional nitwit" and not "Oh shit, he might walk away". Given that Koum has apparently decided it's a good idea to broadcast his unprofessional nitwittery, I imagine that Facebook's first move will be to keep him as far away as possible from anything dealing with 'business' as they possibly can.

Oh my god, what a stupid idea.

[SeaFox]

This is Facebook we're talking about. They could have offered to charter a jet to take him where he needed to go if missing his flight was a possibility from long negotiations.

Yeah, Facebook caved over an airline ticket cost.

Re:Oh my god, what a stupid idea.

[phantomfive]

It's not exactly caving when everyone in the room wanted the deal. Also, realize they were all probably tired of negotiating. Would you want to keep negotiating for weeks, or would you want to get it over with? Of course they all knew that the flight (bought with miles!) was cheaper than the smallest deal anyone was considering.

The real threat was that the deal wouldn't get done. The airline ticket was just a way to say that politely.

BS

[bloodhawk]

The word BULLSHIT jumps to mind. If facebook felt the need for more time they would have happily bought him a replacement first class ticket to anywhere he wanted to go, especially when it is billions of dollars on the line.

Re:How cute

[mx_mx_mx]

Go to http://soylentnews.org/ and just enjoy slashdot again.

We Better Get This Deal Done ASAP...

[raftpeople]

or my 16oz latte is going to get cold and I will need to buy another one.

Something doesn't add up

[rudy_wayne]

Hey should give all 450 million customers a $1 refund.

They supposedly have 450 million users and charge $1 a year, but in 2013 they only had $20 Million in revenue. Either the 450 million users is an inflated meaningless number, or they have huge churn where only 4% of users stick around past the first year that's free.

Re:Something doesn't add up

[Camael]

Not all their users pay the $1 a year. Some of them get free renewals after their year is up, for instance.

Re:Something doesn't add up

[Camael]

Ungodly Churn, almost nobody uses WhatsApp.

Perhaps in your part of the world, but outside of the US, Whatsapp is big in some countries. As in used by practically everyone kind of big.

Facebook was dumb.

[140Mandak262Jamuna]

The non refundable tickets story looks phony. Facebook could afford to fly the founder on a private jet if needed. No matter whether this story is false or true, Facebook paid foolishly high sum for Whatsapp.

The main draw of Whatsapp is that it allows penny pinchers to save on texting fees. In the countries dominated by WhatsApp all incoming calls and texts are free by law. People only pay for outgoing texts. If you have WhatsApp account, from a dumb phone you can send an SMS paying for just one outgoing local text fee. If you have smart phone, it would come under your data plan. That SMS could be echoed to many people as incoming texts by WhatsApp, across countries if necessary. Thus you avoid international texting charges too. These users are tightwads and penny-pinchers extraordinaire. They are the ones who developed elaborate missed-call etiquette and protocols to avoid paying air-time charges. They would sign up, use the first year for free, and create a new account under a new user name and get one more year free. WhatsApp knew it and it did not care, it is able to count old users as new users and show phenomenal user base growth. You can not make any money off these users. They will dump WhatsApp the moment it tries to charge any fees. There is no compelling reason to use WhatsApp and the switching costs are minimal. It is not like Facebook where all your friends are and you have to be in Facebook to see it.

In a developed market with smartphones, where dumb phone market is shrinking, there is no way FB can make any money off WhatsApp. And it has spent 35% of cash on hand in this acquisition. Media is making a big deal of 19 billion dollar figure. But much of it is from overvalued FB stock so that is not relevant. What is important is, in the coming year it is going to be cash strapped. It is having huge buyers remorse. It is going to more circumspect in the next acquisition target. It will swing in the other direction and let a good deal slip in the coming year. That is the effect of WhatsApp on FaceBook.

Re:Facebook was dumb.

[Espectr0]

You are mostly right, i live in Venezuela, here we only get charged for data/outgoing sms/outgoing calls. Incoming sms and calls are free, as they should. Of course, our cell plans suck, for example i only get 60 minutes a month, 300 sms and 250 MB of data.

You are wrong about whatsapp not caring for new accounts, it is widely known whatsapp 450M users have about 70% of daily use.

Here a trick for whatsapp users: don't want to pay anually? Have android? Borrow an iphone, put your simcard, buy whatsapp for 1$, put your simcard back into your android phone. Boom, you get lifetime service for 1$.

Whatsapp is good enough, its strenght isn't security or privacy, but rather its comfort. You don't need to add anyone, no pins, usernames, passwords or logging in. If you want security then use BBM.

Re:How cute

[demonlapin]

I'll join the karma bonfire. Come on over to Soylent News and enjoy actual news for nerds.