Facebook pays $19 billion for WhatsApp

Discussion in 'The Howard Stern Show' started by Sal Goobernale, Feb 19, 2014.

  1. Sal Goobernale

    Sal Goobernale New Member Banned User

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    In 2009, software engineer Brian Acton applied for and was rejected for a job at Facebook.

    So, he co-founded a company called WhatsApp, which he owns a 20% stake in.

    August 3, 2009:

    [​IMG]



    February 19, 2014:

    [​IMG]
     
  2. Avery

    Avery Well-Known Member Banned User

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    Some of these e*deals are so bizarre to me. Amazon doesn't even make money, but for some reason people think they can just turn on the profit spigot sometime in the future.
     
  3. whatsit

    whatsit Dawg Lover VIP

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    Whatsapp? I was robbed.
     
  4. unclefreddy

    unclefreddy Well-Known Member

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    The funny thing about this deal is that when you visit the Whatsapp website they say:
    [h=3]Why we don't sell ads[/h] Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we dont need. - Tyler Durden, Fight Club

    Well not selling ads is about to change... A lot of wealth is built on perception. I'm sure there are going to be a lot of people selling their stock today- this deal obviously doesn't make sense with a lot of stock holders on a lot of different levels. Billions will evaporate. due to the perceived value for this shit company FB. But hey good to those two that sold the company and one more thing. I bet that guy that owns snapchat (that FB originally offered 1 billion for) is really kicking himself today.
     
  5. Phan Neepack

    Phan Neepack Well-Known Member

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    They do make money... but they're investing virtually everything, and are in long term "growth" mode... Besides being a very wealthy man, Jeff Bezos has turned out to be an exceptionally savvy entrepreneur .. Right up there with the likes of Steve Jobs

    http://www.fool.com/investing/general/2013/11/04/why-amazon-is-not-making-money.aspx
     
  6. stripes

    stripes Active Member Banned User

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    that's says a lot about the desperation of fb & its business. acquisitions are key to their business model & this doesn't seem to be a good one. yahoo is the same way & has made some disasterous buys the past few years. the only thing going for yahoo & that dimwitted blonde savior is their stake in that china media company. btw its 1999 all over again.:hat:
     
  7. Getthepoisonout

    Getthepoisonout I regret my username

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    This one struck me as totally nuts. Whatapp started just 4 years ago, has 50 employees and it somehow sells for $19 Billion. Crazy.....but pretty awesome for the guys that have a piece of it.
     
  8. usedtampon

    usedtampon Well-Known Member

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    If in 1999 Jackie's Jokeland business would've been call JM Technologies - your digital entertainment portal, it could've had a market cap of $750 mil. Insanity for a miniscule "company".
     
  9. stripes

    stripes Active Member Banned User

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    The $19 billion deal to sell WhatsApp to[​IMG] Facebook (FB +1.34%) started at Yahoo! (YHOO -0.32%) more than five years ago, when Jan Koum became disillusioned at the way Internet companies were fixated on advertising.
    He left Yahoo in 2007 with one of the company’s other engineers, Brian Acton, and started a company by 2009 that shuns advertising altogether. The strategy allowed them to concentrate on creating an easy-to-use messaging product instead of developing new ways to glean customer information for their marketing pitches, Koum said in a 2012 blog post.

    “No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they’ll see tomorrow,” Koum said in the post. A hand-written note on the his desk reads: “No Ads! No Games! No Gimmicks!”

    Their approach paid off. WhatsApp amassed 450 million monthly users -- twice as many as Twitter (TWTR +1.93%) -- who send billions of messages a day. Yesterday, Facebook Chief Executive Officer Mark Zuckerberg bought their five-year-old company in the largest Internet deal since Time Warner’s $124 billion merger with AOL in 2001, a deal that will almost certainly make Koum and Acton billionaires several times over.

    For Koum, 38, the windfall would stand in stark contrast to his years as a teenager, when his family relied on food stamps after emigrating from Ukraine.

    (Story continues after video.)




    The experience of living in a country where phone lines were often tapped, instilled the importance of privacy in him, said Jim Goetz, a partner with Sequoia Capital Ltd., WhatsApp’s lone venture capital investor.

    ’Contrarian approach’
    WhatsApp doesn’t collect information like name, gender, address or age. Instead, users are approved after their phone numbers are authenticated.

    “It’s a decidedly contrarian approach shaped by Jan’s experience growing up in a communist country with a secret police,” said Goetz in a blog post yesterday on Sequoia’s website. “Jan’s childhood made him appreciate communication that was not bugged or taped.”

    Koum will join Facebook’s board of directors once the deal goes through. Facebook declined to make him or Acton available for an interview.

    The partners are old enough to remember the first dot-com bust. Acton, 42, grew up in
    Michigan and was employee No. 44 at Yahoo, working on advertising, shopping and travel services, according to Wired. He invested during the boom and lost millions of dollars when the market imploded, according to Forbes.

    Facebook reject
    He later hired Koum at Yahoo and served as his mentor, inviting him over to his house and taking him skiing, Forbes said. After exiting Yahoo, Acton said on Twitter that he was turned down for a job at Facebook in 2009.

    The two founded WhatsApp later that year with the idea that smartphone users should be able to easily message each other without incurring fees from phone carriers. The service is free for a year, then costs 99 cents per year after that.

    They eschewed marketing and didn’t employ a public relations person, relying on the word-of-mouth recommendations of its users instead. The service became popular with friends and family communicating in different countries, especially in Europe, because it circumvents the fees charged by phone carriers.

    “While others sought attention, Jan and Brian shunned the spotlight, refusing even to hang a sign outside the WhatsApp offices in Mountain View ,” Goetz said in his blog post. “As competitors promoted games and rushed to build platforms, Jan and Brian remained devoted to a clean, lightning fast communications service that works flawlessly.”

    Koum’s aversion to advertising contrasts with Facebook’s efforts to make more money from people using its service on mobile devices. He said in a statement on the company’s website that WhatsApp will remain autonomous and operate independently.

    “There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product,” he said.
     
  10. Quite Frankly

    Quite Frankly Well-Known Member

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    Rich nerds...
     
  11. jdharmeyer

    jdharmeyer New Member Banned User

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    I was shocked about this as I didn't know about Whatsapp, however if you look at its growth it is pretty phenomenal. A million people a day via social networking that effectively destroys companies that still charge for texts and shit (texts are basically FREE to Verizon and other mobile companies they piggyback texts onto a means that is of no cost to them, so even .05 cent texts are a 1000000% profit). Seems like a good business partnership if he can convince all Facebooks people to download the app. Actually even if only 20% do it will be profitable.

    Regarding Amazon, Bezos makes a SHIT TON of money with the Amazon infrastructure that he created to facilitate his company. He rents out server space worldwide. My guess is Google does the same. All these really rich guys make their money by the "bread & butter" methods like how autoshops do 15 minute brake jobs but charge $100.

    Another example, the NY Yankees make enough from television fees, state subsidies and merchandising to fund their entire operation. Anybody that actually buys a seat in their stadium is basically extra money for them.

    I also read that Google bought Youtube some years ago for a couple of billion or something. They deeply underpaid for youtube as they made all their money back in the FIRST YEAR!
     
    Last edited: Feb 20, 2014
  12. RonHeinzkaboot

    RonHeinzkaboot Adultophile VIP

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    I was hoping to catch a Wassup gif

    That was a geat commercial
     
  13. R.P. McMurphy

    R.P. McMurphy Well-Known Member

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    ...why do they need advertising when they sell all your personal data to mining companies that sling product. if you post on facebook they know everything about you already so instead of selling advertising to the masses and having it bother people they sell the data so advertisers can zero in on whos most apt to buy their product. im glad fb didnt become "a utility" that would have been bullcrap for people who dont want to use their service.