My colleagues and I are shocked by Facebook’s US$16 billion acquisition of the text message application WhatsApp, announced on Wednesday. The little application sells for $0.99 in the USA. It’s used on smart phones for free text, voice, video and picture messaging, and works over wi-fi connections.
It seems to me before Wednesday that most technology analysts believed with 450 million users world-wide that WhatsApp was worth oh, somewhere north of US$ ONE billion.
And who are the founders Jan Koum and Brian Acton that struck it so rich? Here is what I gleaned from Wikipedia and Forbes magazine : Jan Koum is Jewish and grew up in a village outside Kiev in Ukraine. He moved to California with his mother and grandmother in 1992. Brian Acton was the 44th employee at Yahoo. In 1997 Jan Koum was hired by Yahoo as an infrastructure engineer, shortly after he met Acton while working at Ernst & Young as a security tester. Over the next nine years, they worked at Yahoo. Acton invested in the dotcom boom, and lost millions in the dot-com of 2000. In September 2007 Koum and Acton left Yahoo and took a year off, traveling around South America and playing ultimate frisbee. Both applied, and failed, to work at Facebook. “We’re part of the Facebook reject club,” Acton says. Koum was eating into his $400,000 in savings from Yahoo, and drifting. Then in January 2009, he bought an iPhone and realized that the seven-month old App Store was about to spawn a whole new industry of apps. He visited the home of Alex Fishman, a Russian friend who would invite the local Russian community to his place in West San Jose for weekly pizza and movie nights. Up to 40 people sometimes showed up. The two of them stood for hours talking about Koum’s idea for an app over tea at Fishman’s kitchen counter.