How Facebook Wooed, and Won, WhatsApp
As it turns out, the company at the receiving end of Facebook's $16 billion purchase may have had more than one suitor.
.As it turns out, the company at the receiving end of Facebook's $16 billion purchase may have had more than one suitor. According to multiple sources speaking to Fortune, Google also made a hefty offer for the WhatsApp messaging service. Of course, that reported offer looks tiny compared to the winning bid: Google offered $10 billion, with no promise of a board seat for WhatsApp's founder and CEO Jan Koum.
It's not clear when Google's offer happened, or whether WhatsApp seriously considered it. But we do know a bit more about what interested Facebook in the company in the first place. And it looks like the hefty deal was actually years in the making.
According to Business Insider, Facebook CEO Mark Zuckerberg basically "business dated" Koum starting in the spring of 2012. The pair went out for coffee, and on hikes, until Zuckerberg offered the basis of what became yesterday's deal on February 9th of this year. Here's what happened next:
[Zuckerberg] said that this would not be an ordinary startup acquisition – it would be a partnership. He said he wanted to put Koum on Facebook's board. Koum thought about it for a couple days.
Then, last Friday — on Valentine's — Koum came over to Zuckerberg's house. Interrupting Zuckerberg's Valentine's dinner with his wife, Priscilla, Koum said yes, he wanted to do the deal. The two hammered out pricing and terms over chocolate covered strawberries.
Zuckerberg's interest in WhatsApp seems to come from his hunch that the company is towards the beginning of a massive growth cycle. In their release on the deal, Facebook highlighted the company's 450 million active users in any given month, and the estimation that the messaging service — wildly popular overseas, less well-known in the U.S. — adds about 1 million users each day.
If, like many Americans, the massive, Instagram-dwarfing deal is the first you've heard of WhatsApp, Bloomberg has a brief profile of the company's origins and founder. Koum, who is now an extremely wealthy member of Facebook's Board of Directors, spent years living off of food stamps with his family after they moved from the Ukraine to the United States. His business partner and fellow billionaire Brian Acton has also seen quite a stunning reversal in fortune. In 2009, Acton, a former Yahoo engineer, was looking for a job. According to his Twitter feed, he applied at Facebook, who turned him down.
Koum's approach to messaging, encapsulated in a note above his desk that reads "No Ads! No Games! No Gimmicks!” stands in contrast to Facebook's aggressive collection of user data later used to sell and target advertisements. In an attempt to pre-emptively address some of the concerns such a match will make to WhatsApp's users, the company wrote in a blog post that the deal with change "nothing" for how WhatsApp works.