--- publish: true aliases: [Acquired,WhatsApp] --- WhatsApp - Acquired  ## Metadata - Author: **Acquired** - Full Title: WhatsApp - Category: #podcasts - URL: https://share.snipd.com/episode/94139a07-7d44-419d-a59c-59e3525143d1 ## Highlights - The Rise and Fall of Bing Key takeaways: (* Bran and Jan became good friends while working together at yahoo., * Bran later rose through the ranks at yahoo, becoming the chief architect of project Panama., * After becoming CEO of yahoo, Mersom Air talked about Bran and Jan's work on her earnings call.) Transcript: Speaker 2 Internet directory. Basically. It's funny, ye, you mention a chilo. So che obviously is very notable for his work at a yaho. Speaker 1 I know him as like, my mega skip level boss from microsop when he ran bing bcause microsop recruited him over, and he ran search for microso ad then ultimately actually took over all office as well. Well. And of course, you know, the relation ship between yahu and mikraso, many of our listeners probably know, is really e long and complicated, a topic for another day. But bran and jan can become kindred spirits. When jan joins yahu, and brian really rises through the ranks. He ends of becoming the chief architect of project panama within yahu, which stupor, you know, they would talk about it on their earnings calls. I remember carol bart tood talking about it all the time, and a and then mersom air after she became c eo. And that was a massive project to re architect all of the back end of how jahu searched worked and how ads worked on yahu searched. So the two of them, with bryan kind o leading on the technical side, go through this experience of re architect at massive scale, this, you know, original inner net ([Time 0:12:34](https://share.snipd.com/snip/96aa11d4-838c-4325-82ac-f0f3ce92a000)) - How messaging changed the startup landscape Key takeaways: (* Messaging is a powerful tool for building relationships and communicating with others., * Before product market fit, it is important to have conversations about the goals of the company and the product., * Once product market fit is achieved, it is important to focus on maintaining that success., * The main take away from the conversation is that messaging is a powerful tool for building relationships and communicating with others. Before product market fit, it is important to have conversations about the goals of the company and the product. Once product market fit is achieved, it is important to focus on maintaining that success.) Transcript: Speaker 1 Mester, nd, probably bryan and and yan would totally agree with that. It's not about times, t not abot, but but the most important conversations you're having in a, i in a messaging relationship, once they figure this out. You know, yan then also talks about, like before, you know, insert the wat tap one point version, when it was just about statuses and away messages, it was just like ben, you talk about all the time, about the definition of product market fit. It was like your pushing a boulder up a hill. You know, everything is hard. Like getting users to use it is hard getting engagement. Nobody wants to invest. Nobody wants to work for you. Then they's your product market fit, before product market fit. And then all of a sudden they evinced an product market fit. With messaging, everything changes. People are adopting like crazy. All their old yaho friends want to come work for them. Speaker 2 Investors start beating down their doors and literally looking for them in unmarked locations and attempting to net work their way to the founders totally. Speaker 1 And we'll get into how that comes together next in just a sec. But before they do take money, they do another really smart thing, again, for them at the time, and i think this might have actually been bryan that n came up with this, inis end advocated for doing it. So they were free. It was a free ap in the ap store. But again, remember, think back to two thousand nine, they're paid and free. Ha. You could do both in the ap store. And it hadn't yet shaken out that like, free was the way to go. Speaker 2 There wereand there were certainly no inapt purchases or subscriptions like you could, you culd pay an amount of money to down load an ap, or it could be free. ([Time 0:39:41](https://share.snipd.com/snip/9eb02e8f-fa68-4a31-998a-7125582bf4a9)) ## New highlights added January 24, 2023 at 4:01 PM - Sequoia Capital's Secret Investment in Whatsapp Key takeaways: (* Whats App grew rapidly and became a valuable company due to its strategic value., * Sequoia invested heavily in the company, and it is now worth over one billion dollars.) Transcript: Speaker 1 So this happens, and then they're off to the races. By october twenty eleventh, it was early twenty elevent when that round finally closes. By october twenty eleven, whats ap is processing over one billion messages per day. By the next year, august, august twenty twelfth, they grow to ten billion messages per day. That's expedental growth right there. One to ten billion in one year. A few months later, by february twenty thirteentha, whats ap has about two hundred million active users around the world. And at this point, sequoia, in secret, at this point in time, invests another fifty million dollars in the company at a one point five billion dollar valuation for a company that, you know, they're making their one dollar, you know, a year fee that they're only charging in some countries. It's in the u. S, it's in the u. K. I believe it's in some other european countries, but nowhere else around the world are they actually charging for the ap. But tha clearly, the strategic value of this is so high, thats the growth is incredible. Speaker 2 It's not like any multiple of of net income, you're going any reasonable multiple you're goin to get to one and a half billion dollars. One of the fascinating things here is, you know, sequoia, there's no one that invests between. So the last time sequoia investsed, it was seventy eighty million dollars. They come in two years later with a term for a company that they're already basically the only investor and ar the only institutional. They mark up their own deal, and they're not shy about marking it up and saying, hey, like, we think this thing's worth two hundred million dollars. ([Time 0:51:32](https://share.snipd.com/snip/3e611da7-36b6-48bb-8100-c6c01ad9f2ad)) - The Sundar Pichai Meeting Key takeaways: (* Mark and Facebook's CEO, Mark Zuckerberg, had been in talks with Sundar Pichai, the CEO of Google, about an acquisition of Facebook., * Sundar Pichai let two people know about the potential acquisition., * One was Mark Zuckerberg, and the other was Sundar Pichai's friend and Google employee, Jon Leibowitz., * On Tuesday, February 11th, 2014, Zuckerberg and Pichai met to discuss the acquisition, and Zuckerberg agreed to sell Facebook to Google.) Transcript: Speaker 1 And pony ma, the c o, was scheduled to come over to california to finalize the deal with jan and bryan and jim, but he had to have back surgery and had to delay the trip. And were now in late january, early february twenty fourteenth. During this period of time, i'm sure what's itp ido and jon and bryan and jim engineered all this. They kind of let it be known to two parties that things might be going on. One, f course, is mark and face book. The other is gogle. They had gotten to know sundar, who, at that point in time was running android, remember, at gugle. And they kind of let it be known to sundar that something might be going on. Sundar gets them a meeting scheduled with larry page for tuesday february eleventh, twenty fourteen. Somehow faithbook and zak find out that this meeting is scheduled, and he gets jan over to his house the monday night before february tenth. In that a meeting, he says, no, we're serious about an acquisition. I know all your beliefs about advertising and your product beliefs of what's ap and how committed you are to privacy and being independent. ([Time 0:56:45](https://share.snipd.com/snip/df94dad2-078c-48cb-9666-bb73d970038f)) - Face Book's Acquisition of Google Key takeaways: (* Facebook wants to remain independent., * Google wanted to acquire Facebook, but Facebook refused., * Facebook became a very large holder of Google stock., * Facebook made Mark Zuckerberg a board member of Facebook.) Transcript: Speaker 1 And so here's the deal, we wan't t acquire you. It'll be a big number. What's happe is going to remain independent. And now, remember, face book can credibly say this, as we talk o on the show, they are the the poster child for making these leave em alone acquisitions, you know, inste graham being a number one here. And a, it's going to be t two years since mister graham. So there was two, two years since the oracle at this point. And id nat really gone well and and he said, i really want this to be a partnership. So much to ta, most of the will do most of the deal in stock, and you're going to become a very large holder. And face book on you personally. And we will make you a board member a face book, which, as i think, one of six or seven at the time. Ye, and nobody else. The only face book employee board membersre are mark and charrell and everyone else is a outside board member, so this is pretty big. He really, it's unclear if face book knew about ten cents, but they knew about gogle. They really did not want gogle to anquire. Whats a. Jan says, o k, interesting. Thank you very much. The next day, he and brian go down to gogle. They meet with larry page. They talk for an hour, have a nice conversation. A unclear and where'slen? ([Time 0:58:10](https://share.snipd.com/snip/0063a735-d931-43c7-989d-173f3623ede1)) - The Mobile Messaging Wars Key takeaways: (* Google has launched a new messaging product., * Googles messaging product is similar to an annual tradition., * Twitter had a thirty billion dollar market cap at this point., * Twitter had a very robust advertising business model.) Transcript: Speaker 2 They're, they're there messaging world right now, cause gogle's launched some new form of messenger. I think it's like an annual tradition for them to launch a new messaging product. And so i think at this point, like g chat, i don't think was totally dead, but hang outs, they were trying to double down on. It was before duo and some of these new fangled ones. But like, you got to remember, back at this time, people really felt that, or at least the teck press was obsessed with writing about the mobile messaging wars. And there are these deep dives on we chat china and whats ap's crazy growth. And face book had acquired bluga, i think, and launch messenger at this point. And it was, you know, who will win this new is this the new ap store? You know, is is messaging sort of the new ap like now, we don't think of gogo really as a messaging company, even though obviously tons and tons of messages are exchanged on android all the time. They were very much still in this race for what everyone thought was going next. Speaker 1 User in her face, paradime. Speaker 2 And failing at itles, i said, anyoull traditionlly lit a new onesute. Speaker 1 In the meantime, janan and jim and bryan thei'r turn forgur ali. Well, what's our number? What's this? What do we thnk we're worth? And twitter had gone public recently, and twitter had a thirty billion dollar market cap and had fewer m a s than aw. Of course, twitter had a very robust advertising business model at this point, and whats ave had very little business model. But, you know, they kind of look at each other and they're like, well, twitter's worth thirty billion. ([Time 0:59:29](https://share.snipd.com/snip/85cfd524-4966-4ea2-8857-8c0f5238135b)) - The Takeout Acquisition Key takeaways: (* Facebook was expecting to take longer to monetize its new acquisition, but was surprised when it was cashflow positive almost immediately., * Facebook was willing to pay a high price for good will in order to keep the users and assets of the acquired company.) Transcript: Speaker 1 Now, of course, this is a counting treatment. And anybody who's, you know, worked in investment banking or certainly counting nos, good will is, you know, it's just worthou stuff. It's a plug. But, but i think you're right, like, this is illustrative. You know, i think they were thinking, like, yaas, is going to take a while and what not. But, like, i think face book was fully expecting that this was going to be a cashfull o r just like it's tegram. Yea. Speaker 2 So listeners, if you're new to the show, the way that we categorize these acquisitions are people, technology, product, business line, asset or other. And occasionallyw we categorize it as a something that i'm going to elect to use to day, which is a takeout, which, as it is worth a lot of our money to this thing from existing as an independent entity or in the hands of some one else. And we are willing to pay handsomely in the form of good will to make that happen. Good will, you could argue, product, yes. You could argue the asset of the users, certainly wasn't the business line, technology, lord knows face boot could build people. You know, there were fifty people that worked there at the time. Obviously some talented founders, lots of talented engineers. But my god, thing was a take out acquisition? ([Time 1:20:29](https://share.snipd.com/snip/dbba3728-ce79-4689-ba60-43b6fc4a87b8)) - The Importance of Value Creation Key takeaways: (* It is worth noting that carriers just figured out a way to bill everyone, and that this does not actually amount to a small savings for them., * Clearly, value capture is not always effective, but it can still be massive in terms of value creation for the world., * And it is also worth noting that being the first platform to implement a platform wide can be a major advantage.) Transcript: Speaker 2 Yes, yes. Actually, it's funny. So sometimes we do this section, i'd like to do it to day, on value creation versus value capture, ecause a lot of companies can create a ton of value in the world, but one of the sort of things to do is make sure that you're able to capture some of that value you create. Wats didn't really try, like wats ap created so much value. I mean, and frankly, they destroyed tons of value for carriers. Speaker 1 But until that able and slightly debatable, i think. O k, i think you're probably right. But jan and bryan got this question all the time, and theyre kind of, and answer that they came up with was, no, no, know, we're actually helping carriers because we're encouraging people to adopt smart funds and move over to data plans, which data plans are more expensive than text plans. And i think its fair, it'sit'. It's a fair argument, but it's flawed in that that was going to happen anyway. Speaker 2 So it is worth noting too that carriers just figured out a way to bill everyone, like they just repackaged all their theyre they're pricing. Speaker 1 It's not like they actually material lo e smalles money on this. Speaker 2 But, like, i don't, i don't consider what's up an effective value capture machine, and still is not, clearly ye or capturi. Speaker 1 Basically zero value, but massive value creation for the world. And also, again, we dnt talk about this as much, but the end and inscription in being the first platform to implement that platform wide, across everything a, you know, nobody saw that coming in twenty fourteen. ([Time 1:30:14](https://share.snipd.com/snip/1b12881b-e471-421b-815c-289457937929))