"we sell ads."
June 6, 2018 10:28 AM Subscribe
I was never quite clear why they sold to Facebook in the first place. It didn't seem a good fit with their goals.
Their goals are cash money and they sold because C.R.E.A.M. "Goals" and "values" in silicon valley are just bullet points in pitch decks.
posted by GuyZero at 11:06 AM on June 6, 2018 [24 favorites]
Their goals are cash money and they sold because C.R.E.A.M. "Goals" and "values" in silicon valley are just bullet points in pitch decks.
posted by GuyZero at 11:06 AM on June 6, 2018 [24 favorites]
I was never quite clear why they sold to Facebook in the first place. It didn't seem a good fit with their goals.
I've always assumed it was A) because they weren't really ideologues about privacy (they seem like a lot of tech folks I know, who find FB's tracking methods over-the-top and unpleasant, but also are fairly close to "if you aren't doing anything wrong, what do you have to hide?" in terms of their own mentality) and B) because FB put the biggest check on the table and they didn't want to risk having what happened to Twitter's valuation happen to theirs.
posted by protocoach at 11:08 AM on June 6, 2018 [5 favorites]
I've always assumed it was A) because they weren't really ideologues about privacy (they seem like a lot of tech folks I know, who find FB's tracking methods over-the-top and unpleasant, but also are fairly close to "if you aren't doing anything wrong, what do you have to hide?" in terms of their own mentality) and B) because FB put the biggest check on the table and they didn't want to risk having what happened to Twitter's valuation happen to theirs.
posted by protocoach at 11:08 AM on June 6, 2018 [5 favorites]
When you already have a couple billion dollars, another few hundred million isn't going to break the bank.
posted by meowzilla at 11:08 AM on June 6, 2018 [1 favorite]
posted by meowzilla at 11:08 AM on June 6, 2018 [1 favorite]
I would guess there was a lot of pressure from their VC backers to take the money, Facebook made some promises with no intention of carrying out in the long term in order to seal the deal, and the WhatsApp founders told themselves a story that getting in bed with the devil would turn out well just this one time.
posted by Big Al 8000 at 11:14 AM on June 6, 2018 [13 favorites]
posted by Big Al 8000 at 11:14 AM on June 6, 2018 [13 favorites]
Archive link to dodge the paywall.
Facebook paid $22 billion for WhatsApp. That was a staggering amount of money, particularly for a company that only raised $60M, and enormous even by the standards of overvalued tech acquisitions. It was just too much to pass by, I think, and you can tell yourself maybe you'll be able to work in the new environment. Apparently not here, not so much.
Nice of the WSJ to highlight the $1.3B left when the founders walked, but that's only ~10% of the total deal value to them. At that scale it's not so painful to leave. I was curious about why they didn't pursue their contractual right to accelerate vesting though. The WSJ just says "Mr. Acton initiated the clause in his contract allowing for early vesting of his shares. But Facebook’s legal team threatened a fight, so Mr. Acton, already worth more than $3 billion, left it alone, according to people familiar with the matter. "
posted by Nelson at 11:21 AM on June 6, 2018 [3 favorites]
Facebook paid $22 billion for WhatsApp. That was a staggering amount of money, particularly for a company that only raised $60M, and enormous even by the standards of overvalued tech acquisitions. It was just too much to pass by, I think, and you can tell yourself maybe you'll be able to work in the new environment. Apparently not here, not so much.
Nice of the WSJ to highlight the $1.3B left when the founders walked, but that's only ~10% of the total deal value to them. At that scale it's not so painful to leave. I was curious about why they didn't pursue their contractual right to accelerate vesting though. The WSJ just says "Mr. Acton initiated the clause in his contract allowing for early vesting of his shares. But Facebook’s legal team threatened a fight, so Mr. Acton, already worth more than $3 billion, left it alone, according to people familiar with the matter. "
posted by Nelson at 11:21 AM on June 6, 2018 [3 favorites]
When you convince yourself that the value is in the people and not in the name/technology, it's really tempting to cash out. After all, you stick with Facebook for a year or two, get paid, then launch a new property with that money, and leave Facebook with a company that isn't worth what they paid.
Only after the sale do they start to realize that their success was luck, and that they probably can't repeat it even with all that money. Or they've lost their idealism that they had in their 20s, and aren't up for years more of startup culture.
posted by explosion at 11:24 AM on June 6, 2018 [7 favorites]
Only after the sale do they start to realize that their success was luck, and that they probably can't repeat it even with all that money. Or they've lost their idealism that they had in their 20s, and aren't up for years more of startup culture.
posted by explosion at 11:24 AM on June 6, 2018 [7 favorites]
Yeah and this wasn't the kind of deal where the founders got a fraction of a percent of the deal. The WhatsApp founders got, like, Wal-Mart-Walton-family kind of money here. Like $6B to $9B each. And the other company vying to buy WhatsApp was Tencent.
Like, if you don't like FB's tracking, man, you are not going to like Tencent's.
posted by GuyZero at 11:25 AM on June 6, 2018 [11 favorites]
Like, if you don't like FB's tracking, man, you are not going to like Tencent's.
posted by GuyZero at 11:25 AM on June 6, 2018 [11 favorites]
"I was never quite clear why they sold to Facebook in the first place. It didn't seem a good fit with their goals."
"Their goals are cash money"
"When you already have a couple billion dollars, another few hundred million isn't going to break the bank."
Didn't Jan Koum grow up on welfare or something? I can imagine that an offer of billions of dollars would be pretty hard to turn down coming from a background like that.
"Only after the sale do they start to realize that their success was luck, and that they probably can't repeat it"
This seems like the best argument in favor of selling out that I can think of. If you only get one chance, you might as well take the money when it's there, right?
posted by kevinbelt at 11:50 AM on June 6, 2018 [3 favorites]
"Their goals are cash money"
"When you already have a couple billion dollars, another few hundred million isn't going to break the bank."
Didn't Jan Koum grow up on welfare or something? I can imagine that an offer of billions of dollars would be pretty hard to turn down coming from a background like that.
"Only after the sale do they start to realize that their success was luck, and that they probably can't repeat it"
This seems like the best argument in favor of selling out that I can think of. If you only get one chance, you might as well take the money when it's there, right?
posted by kevinbelt at 11:50 AM on June 6, 2018 [3 favorites]
I was specifically referring to the estimated $1.3 billion the founders gave up when they left Facebook early. I don't think anyone can really judge them for the initial $60 billion acquisition.
posted by meowzilla at 12:05 PM on June 6, 2018
posted by meowzilla at 12:05 PM on June 6, 2018
I am always so confused by these valuation numbers. They're crazy. The first thing I do is try to find a company that is huge and that everyone has heard of with a similar market cap. I've been thinking about making a service to do it, like you type in "whatsapp" and it gives a list of companies who's current market cap is similar.
Dell's market cap is 17 billion, as a comparison.
posted by RustyBrooks at 1:04 PM on June 6, 2018 [7 favorites]
Dell's market cap is 17 billion, as a comparison.
posted by RustyBrooks at 1:04 PM on June 6, 2018 [7 favorites]
I wonder if the monetization is likely to push people toward WeChat, Telegram and/or Signal?
It's moved the French government to replace WhatsApp with their own implemntation of Riot.IM.
I personally wish Riot.IM was more well known, because it's fully cross-platform and Federated. It's available on Windows, Linux, MacOS, Android, and iOS as well as being available as a web-based version for anyone else.
The federated aspect means I can run my own server, and keep my encryption and encrypted chats on my server, and still be able to communicate with anyone using the Matrix protocol on any other server.
Honestly, I truly wish Riot.IM got as much love as WeChat or Telegram, especially considering unlike them, it is fully Free Open Source Software. Telegram still has a lot of code that is not up for public view, making them suspect in my personal opinion.
posted by deadaluspark at 1:05 PM on June 6, 2018 [21 favorites]
It's moved the French government to replace WhatsApp with their own implemntation of Riot.IM.
I personally wish Riot.IM was more well known, because it's fully cross-platform and Federated. It's available on Windows, Linux, MacOS, Android, and iOS as well as being available as a web-based version for anyone else.
The federated aspect means I can run my own server, and keep my encryption and encrypted chats on my server, and still be able to communicate with anyone using the Matrix protocol on any other server.
Honestly, I truly wish Riot.IM got as much love as WeChat or Telegram, especially considering unlike them, it is fully Free Open Source Software. Telegram still has a lot of code that is not up for public view, making them suspect in my personal opinion.
posted by deadaluspark at 1:05 PM on June 6, 2018 [21 favorites]
And Facebook does not "sell ads". They sell "aggregated user data for all uses".
posted by Samizdata at 1:09 PM on June 6, 2018 [1 favorite]
posted by Samizdata at 1:09 PM on June 6, 2018 [1 favorite]
Honestly, I truly wish Riot.IM got as much love as WeChat or Telegram
I consider myself fairly up to speed on chat facilities and encrypted chat and this is the first time I've heard of Riot.IM, but I much prefer to learn about it through the "giving love" part than the "complaining about ignorant lusers" one.
posted by rhizome at 1:13 PM on June 6, 2018 [4 favorites]
I consider myself fairly up to speed on chat facilities and encrypted chat and this is the first time I've heard of Riot.IM, but I much prefer to learn about it through the "giving love" part than the "complaining about ignorant lusers" one.
posted by rhizome at 1:13 PM on June 6, 2018 [4 favorites]
My plan would be, suck it up for the remaining time and donate every cent to privacy causes, lobbying, public awareness, and government transparency.
posted by benzenedream at 1:19 PM on June 6, 2018 [3 favorites]
posted by benzenedream at 1:19 PM on June 6, 2018 [3 favorites]
I consider myself fairly up to speed on chat facilities and encrypted chat and this is the first time I've heard of Riot.IM, but I much prefer to learn about it through the "giving love" part
I think that's part of why knowledge of it has moved slowly, it definitely does not have much ad-backing behind it, and seems to definitely be a "word of mouth" operation in getting people to adopt it.
Which is surprising to me considering its available on Google Play and on the F-Droid store. Even Signal is only on Google Play because it has so much that relies on Google Play Services (from here, GPS). Running Signal on LineageOS without GPS seems to work fine enough, but it crashes at least once a day and I have to set it to be "kept alive" in the background. Riot has the same issue with needing to be kept alive, but it doesn't crash, and does not need GPS to run. Running Signal without GPS literally gives you a warning about how its unstable and can result in lost messages (I have yet to experience that, though).
posted by deadaluspark at 1:24 PM on June 6, 2018 [1 favorite]
I think that's part of why knowledge of it has moved slowly, it definitely does not have much ad-backing behind it, and seems to definitely be a "word of mouth" operation in getting people to adopt it.
Which is surprising to me considering its available on Google Play and on the F-Droid store. Even Signal is only on Google Play because it has so much that relies on Google Play Services (from here, GPS). Running Signal on LineageOS without GPS seems to work fine enough, but it crashes at least once a day and I have to set it to be "kept alive" in the background. Riot has the same issue with needing to be kept alive, but it doesn't crash, and does not need GPS to run. Running Signal without GPS literally gives you a warning about how its unstable and can result in lost messages (I have yet to experience that, though).
posted by deadaluspark at 1:24 PM on June 6, 2018 [1 favorite]
Mod note: Couple comments deleted. What if we just chose not to get into some weird fight, how about that.
posted by LobsterMitten (staff) at 1:37 PM on June 6, 2018 [10 favorites]
posted by LobsterMitten (staff) at 1:37 PM on June 6, 2018 [10 favorites]
I am always so confused by these valuation numbers. They're crazy. The first thing I do is try to find a company that is huge and that everyone has heard of with a similar market cap.Same!
This is a useful tool. A co-worker was hyping investment in Tesla, and I looked at the market cap and observed that it already had approximately the same market cap as General Motors, and almost half the market cap of Toyota. That's pretty much all I needed to know about the long term viability of investment in Tesla.
posted by chrchr at 1:51 PM on June 6, 2018 [2 favorites]
Nice of the WSJ to highlight the $1.3B left when the founders walked, but that's only ~10% of the total deal value to them. At that scale it's not so painful to leave. I was curious about why they didn't pursue their contractual right to accelerate vesting though. The WSJ just says "Mr. Acton initiated the clause in his contract allowing for early vesting of his shares. But Facebook’s legal team threatened a fight, so Mr. Acton, already worth more than $3 billion, left it alone, according to people familiar with the matter
Likely he felt 3 *billion* was enough to fill his swimming pool of money and spend the rest of his life swimming in it?
posted by Canageek at 2:01 PM on June 6, 2018 [1 favorite]
Likely he felt 3 *billion* was enough to fill his swimming pool of money and spend the rest of his life swimming in it?
posted by Canageek at 2:01 PM on June 6, 2018 [1 favorite]
OTOH, it made a good impression on my that they had some skin in the game when they walked.
posted by Samizdata at 2:14 PM on June 6, 2018 [2 favorites]
posted by Samizdata at 2:14 PM on June 6, 2018 [2 favorites]
Facebook does not "sell ads". They sell "aggregated user data for all uses".
And as we've learned this year, sometimes not-so-aggregated.
posted by rokusan at 3:49 PM on June 6, 2018
And as we've learned this year, sometimes not-so-aggregated.
posted by rokusan at 3:49 PM on June 6, 2018
> rokusan:
"Facebook does not "sell ads". They sell "aggregated user data for all uses".
And as we've learned this year, sometimes not-so-aggregated."
Rather I mean they pull ALL sorts of data together and make sure it is all pointed at specific identities.
posted by Samizdata at 5:22 PM on June 6, 2018
"Facebook does not "sell ads". They sell "aggregated user data for all uses".
And as we've learned this year, sometimes not-so-aggregated."
Rather I mean they pull ALL sorts of data together and make sure it is all pointed at specific identities.
posted by Samizdata at 5:22 PM on June 6, 2018
I have values, lots of which I could really use $22 billion to pursue. It's kind of ridiculous to suggest the founders should have turned down that much money for the principle of secure messaging. C'mon.
posted by cj_ at 6:16 PM on June 6, 2018 [3 favorites]
posted by cj_ at 6:16 PM on June 6, 2018 [3 favorites]
With $6+ billion combined, they could found a pretty good startup.
posted by blue_beetle at 6:58 PM on June 6, 2018
posted by blue_beetle at 6:58 PM on June 6, 2018
I wouldn't want to hang out at the Facebook campus either, given a choice. Why constrain yourself to a cheesy industrial park every day, and the cookie-cutter McMansion housing in that area, when you could quite literally live and work anyplace in the world that has broadband? I can think of about 10 other cities just in California that I would rather call home.
posted by Brocktoon at 7:20 PM on June 6, 2018 [2 favorites]
posted by Brocktoon at 7:20 PM on June 6, 2018 [2 favorites]
I believe deeply in privacy and despise Facebook and I would still sell out for a multi-billion dollar check from them. And I wouldn't even feel bad because several billion of those dollars could go in a donation to the EFF or other organisations who would do enough good with it to assuage my conscience.
posted by lollusc at 10:47 PM on June 6, 2018 [2 favorites]
posted by lollusc at 10:47 PM on June 6, 2018 [2 favorites]
As far as snot-nosed internet zillionaires go, I'll give these WhatsApp cats a second look for not being down with Campus Life and for simply having enough of the whole ball of wax.
I'd sell out too. It's actually hard to sell out on purpose!
posted by rhizome at 11:31 PM on June 6, 2018 [1 favorite]
I'd sell out too. It's actually hard to sell out on purpose!
posted by rhizome at 11:31 PM on June 6, 2018 [1 favorite]
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I wonder if the monetization is likely to push people toward WeChat, Telegram and/or Signal?
posted by rednikki at 10:59 AM on June 6, 2018 [4 favorites]