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Businesses Communications Facebook Social Networks The Almighty Buck

How Jan Koum Steered WhatsApp Into $16B Facebook Deal 136

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."
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How Jan Koum Steered WhatsApp Into $16B Facebook Deal

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  • Rags to riches... (Score:5, Interesting)

    by TWX ( 665546 ) on Thursday February 20, 2014 @10:01AM (#46294169)
    ...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.
  • by dubbreak ( 623656 ) on Thursday February 20, 2014 @05:59PM (#46299251)
    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.

God made the integers; all else is the work of Man. -- Kronecker