Social media giant Facebook shocked the world today when it announced the acquisition of mobile messaging service WhatsApp for a whopping $19 billion (around Rs 1,18,300 crore), not only making this the largest acquisition made by Facebook, but also an unprecedented amount paid for a company that is just five years old and has only 55 employees.
While Facebook has been trying every trick in the book to strengthen presence in the mobile and messenger space, the California-headquartered ‘early stage technology startup’ that was founded in 2009 by Stanford University graduate Brian Acton and college drop-out Jan Koum has overnight turned out to be the perfect fairy tale for entrepreneurs globally.
Just to put the size of this deal into context, Facebook has valued Whatsapp more than American Airlines, 1985-founded multinational private equity firm Blackstone Group, iconic motorcycle manufacturer Harley-Davidson, 1909-founded credit rating agency Moody’s and even over a century-old Xerox.
The two founders of Whatsapp, both former employees of Yahoo!, set up Whatapp with the simple agenda of providing a “better SMS alternative”, as the company’s website says. They describe themselves as “two guys who spent combined 20 years doing geeky stuff at Yahoo! Inc. before starting WhatsApp Inc.”.
Even as today the two have proved right on their belief that “we can, because someday very soon everybody will have a Smartphone”, Acton and Koum had tried several other things before Whatsapp happened.
Acton, who started working in 1992 according to his profile on professional networking website LinkedIn, worked for around a year each at Rockwell International as a system administrator, at Apple hardware testing engineer, and briefly at Adobe before joining Yahoo! where he served in several roles for around 11 years. He holds degrees in computer science from University of Central Florida, University of Pennsylvania and Stanford. In his recent role, Acton is the CEO of Whatapp.
However, the other partner Koum, who is described as a “troublemaker at school” by Forbes, calls himself “barely graduate” on his profile on LinkedIn. The ‘senior tweet manager’ at Whatapp, dropped out of San Jose State University and describes his job at LinkedIn as that of “building cool shit used by millions of people”.
Very interestingly, Whatsapp was started when Acton was denied job at Facebook and Twitter in 2009, forcing him to set out to do something by his own alongwith his friend from Yahoo! Koum.
Acton’s updates on micro-blogging website Twitter on August 4, 2009 says, “Facebook turned me down. It was a great opportunity to connect with some fantastic people. Looking forward to life's next adventure.”
He also light heartedly deals with a rejection at Twitter as, “Got denied by Twitter HQ. That's ok. Would have been a long commute.”
Whatsapp currently has over 450 million users per month, with a million more signing each day. In several emerging markets, Whatsapp is much more popular than Facebook. According to a survey conducted by Jana Mobile, in India, 55.08 per cent of the 120 respondents said they use Whatsapp for messaging as against 0.85 per cent that said they use Facebook.