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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."
Hey should give all 450 million customers a $1 refund for the service outage that happened after the deal went through.
- In Soviet Korea, only old people loose all their bases to Natalie Portman's petrified hot grits overlords.
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.
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.
or my 16oz latte is going to get cold and I will need to buy another one.
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.
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.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
I'll join the karma bonfire. Come on over to Soylent News and enjoy actual news for nerds.