9 ms·

There Is No Justification for What Mark Zuckerberg Did to WhatsApp

48 points by panarky 8y ago

Bucephalus355 8y ago
There is no justification for a lot of what Mark Zuckerberg did.
ggg9990 8y ago
Right, I'm sure that the WhatsApp founders thought that Facebook paid $19 billion for a company just to keep charging $1 per year with no ads and no data collection.
- jimmywanger 8y ago
  As long as Facebook paid, their money was good, and there was a contract signed, it does not matter. This is wrong. Who cares what somebody else thinks when you get billions of dollars? Not your problem anymore. They should have really held Zuckerberg's feet to the fire and enforced the contract by suing. It seems like a slam dunk. (IANAL)
  - duxup 8y ago
    "enforced the contract by suing" What did the contract say? The only contract I saw in the original story noted that if adds were forced on them some people could leave with more stock..... that wouldn't have prevented anything.
    - jimmywanger 8y ago
      No, but they could have bled Facebook further with more stock, which is fairly freely convertible. "You own the company. If you put ads on the product we sell, give us more money." You don't have to prevent anything, you just have to make them think about things.
  - deleted 8y ago
    [deleted]
- sunstone 8y ago
  I'm assuming here that your comment is sarcasm. But in fact it's not entirely wrong headed. At the time of the purchase WhatsApp had clear momentum with 500m users paying $1 per year, say. The standard business assessment is that a business is worth 10x earnings so 5bn. But that's assuming WhatsApp was static in users but it, in fact, was on a growth curve. So $5bn was the low end of valuation, the top end would include all 7bn humans on earth. That would be stretch at $70bn for WhatsApp. $22bn in the end was pretty reasonable given the circumstances.
  - ggg9990 8y ago
    Your analysis assumes that WhatsApp cost $0 to maintain and grow and that 2-day old infants are using WhatsApp, and ignores the fact that the vast majority of WhatsApp users at the time of acquisition had not even paid the $1.
    - sunstone 8y ago
      True enough. But the factors you mention are round off errors and "not material" as a steely eyed accountant would say. At the time of the buyout the "conversion ratio" of those that paid the $1 after a year would have been well established.
      - ggg9990 8y ago
        It's more than that -- in many of their biggest markets (e.g. India) they waived the $1 fee entirely so all of their users there were free. So you can't really figure out the conversion ratio because it was never tried.
        sunstone 8y ago
        Are you suggesting that Indians can't pay $1/yr? That would be... inadvisable.
        ggg9990 8y ago
rdtsc 8y ago
> also had to make a lot of promises. Some of those promises were even enshrined in the acquisition agreement: If Facebook imposed “monetization initiatives” like advertising onto WhatsApp, its founders’ shares would vest immediately, and they could leave without suffering any kind of financial penalty. That's pretty interesting. They foresaw it of course and put a claim in the contract about it. Though when trying to trigger it FB fought back so Acton left the money on the table. > Acton gave up some $900 million; Koum gave up about $400 million. You need to be really unhappy at work if you’re willing to quit a job that’s effectively paying you some $60 million per month, and from which you basically can’t be fired. A new type of "fuck you" money VC style - you can have your dirty stock options I am out of here. > or was he talked into breaking his promise by Sandberg and other executives looking covetously at WhatsApp’s unmonetized userbase? Either way, he has clearly failed a key leadership test. The leaders tend to aggregate around them minions who are an exaggerated version of themselves. If they are liars they will surround themselves over time with even bigger liars. If they are narcissists they'll end up with minions who are narcissists. It's mostly natural selection. Well it happened in this case, there was a clash and those who don't agree leave. Over enough years it "distills" the company culture into whatever characteristics the top leaders have.
- bsg75 8y ago
  > The leaders tend to aggregate around them minions who are an exaggerated version of themselves Is there a term for this behavior? It explains a number of situations.
  - jessaustin 8y ago
    I don't know the answer to your question, but the proposition seems related to Conway's Law?
  - pmorici 8y ago
    Birds of a feather flock together.
  - notacoward 8y ago
    On the dark side of this, "a fish rots from the head"
sandov 8y ago
The problem is that there's not a good free and open source alternative to Whatsapp. Signal requires google services and phone number, Telegram doesn't encrypt by default, riot's interface is still not good enough. I can't redirect my non-techie friends to any alternative because none of them is good enough yet.
- acct1771 8y ago
  www.riot.im
  - acct1771 8y ago
    Ah, didn't see you mentioned it because lowercase.
- veidr 8y ago
  I had the same problem recently. After failing to get my friends and wife to use Keybase (they tried it, but it just doesn't work on mobile beyond basic text chats with no image pasting). Requirements were: secure, iOS/Android/Mac/Linux/Windows, multi-person chats, and multiple simultaneous/alternating device support (that means chat history needs to propagate to my phones and computers). iMessage was not considered (because it supports only iOS & macOS) and WhatsApp was not considered (because Facebook). After looking at Signal, Telegram, Keybase, and Wire, we ended up using Wire. It's not perfect by a long shot, but it is better than the others we tested and AFAICT better than any solution currently available. But I had never heard of it until I really started looking around. https://wire.com https://wire.com
  - Siimteller 8y ago
    Hi, curious about the "not perfect" part (I work at Wire) - what stuff would be prio for you to improve?
    - veidr 8y ago
      Hi! Okay sure, I will tell you! I am rooting for you guys. 1. Presence/active device detection. Often I am sitting right at my computer actively chatting with somebody, and yet my phone sitting on the desk right next to it is blowing up with notifications of the same messages I am replying to. 2. Too many features. I am constantly accidentally activating features like snapchat-style disappearing messages and weird alien voice effects. Cool if you have them enabled by default but I would like settings to turn OFF the many features that I literally never use (particularly on mobile where there are both small screens and more features, hence more icons). 3. 10-device limit. I know it sounds crazy but I have 2 phones and a few tablets and computers at work and home and I often have to delete a device to use the one I am at now. (20 devices would work for me; even 15 probably would.) 4. Initial log in / start up performance. I know it's hard with the huge photos and encryption. But sometimes i get a notification on my watch that my wife just said XXXXX and I want to respond RIGHT NOW on my computer. But it takes like 8 seconds on an iMac Pro to get to the active/ready state after booting the app. (I tend to just leave it open for this reason, but sometimes have to reboot or whatever and it is not). I would prefer it started up and let me send IMMEDIATELY even if I had to wait for it to load/decrypt the chat histories. Those are the main ones off the top of my head. It is a great product, though, and I appreciate your efforts!
pier25 8y ago
I'd love to move out of Whatsapp, but in Mexico and Spain literally everyone is using it. The other day I ordered take-out exclusively from Whatsapp. The company where I work recently implemented user support using Whatsapp. I buy coffee from a nearby roaster and he informs me the day before roasting so that I can get fresh coffee. I also know lots of parents that communicate with schools and create groups with other parents.
- always_good 8y ago
  Not to mention it will only become more entrenched since carriers at least here in Mexico don't count Whatsapp/Facebook towards your data usage, which is pretty awful if you were ever hoping for a competitor to emerge.
  - pier25 8y ago
    Yeah, that too. :(
  - jxsonl 8y ago
    Same for some SEA countries (Malaysia & Singapore), whatsapp (some includes other popular messaging apps such as WeChat, FB messenger) messages/calls does not count toward your data usage for most telcos and it is the main way people communicate, Whatsapp basically replaced SMS there when it was launched.
anilgulecha 8y ago
With Whatsapp's Acton investing 50MM in Signal, perhaps that's the way for the user-base to go. I only hope Signal will take steps proactively to not go down whatsapp's path (lucrative as it was).
shmerl 8y ago
Whatsapp was bad to begin with. Some non standard XMPP without federation and with very poor security. Irresponsible developers who created it, shouldn't have started such project.
Redoubts 8y ago
> What’s more, WhatsApp’s two founders both left hundreds of millions of dollars on the table, so keen were they to leave Facebook’s ad-friendly walls. (It turns out that their contractual right to being paid out in full would require them to sue for the money, and, according to the Journal, neither of them had the appetite for that.) Can I sue for it then?
- lord_ring_11 8y ago
  U can bet on other peoples property with credit default swaps, but unfortunately you can’t sue on behalf of others
duxup 8y ago
They bought the company, it's facebook's to do with as they wish. There was talk about independence but no indication that facebook was paying bazillions and were going to leave them alone for long. The founders even knew it enough to note the possibility of having ads forced on them in their contracts. I'm no fan of facebook, but justification is ... it is their product.
fjsolwmv 8y ago
Why is it Zuck's fault if he lets Sandberg monetize WhatsApp, but it wasn't Acton and Koum's fault for letting Zuck do it? How can it be Facebook's management's fault if they let 3rd party apps abuse FB user data, but not WhatsApp managements fault for letting Facebook do the same? Acton and Koum sold out their users for a huge payday, and now they are so rich that they can walk away from a few hundred million dollars to "buy an indulgent" for their immortal souls.
merricksb 8y ago
Ongoing discussion about WSJ article still on front page: https://news.ycombinator.com/item?id=17238241 https://news.ycombinator.com/item?id=17238241

48 points by panarky 8y ago

There is no justification for a lot of what Mark Zuckerberg did.

Right, I'm sure that the WhatsApp founders thought that Facebook paid $19 billion for a company just to keep charging $1 per year with no ads and no data collection.

jimmywanger 8y ago
As long as Facebook paid, their money was good, and there was a contract signed, it does not matter. This is wrong. Who cares what somebody else thinks when you get billions of dollars? Not your problem anymore. They should have really held Zuckerberg's feet to the fire and enforced the contract by suing. It seems like a slam dunk. (IANAL)
- duxup 8y ago
  "enforced the contract by suing" What did the contract say? The only contract I saw in the original story noted that if adds were forced on them some people could leave with more stock..... that wouldn't have prevented anything.
  - jimmywanger 8y ago
    No, but they could have bled Facebook further with more stock, which is fairly freely convertible. "You own the company. If you put ads on the product we sell, give us more money." You don't have to prevent anything, you just have to make them think about things.
- deleted 8y ago
  [deleted]
sunstone 8y ago
I'm assuming here that your comment is sarcasm. But in fact it's not entirely wrong headed. At the time of the purchase WhatsApp had clear momentum with 500m users paying $1 per year, say. The standard business assessment is that a business is worth 10x earnings so 5bn. But that's assuming WhatsApp was static in users but it, in fact, was on a growth curve. So $5bn was the low end of valuation, the top end would include all 7bn humans on earth. That would be stretch at $70bn for WhatsApp. $22bn in the end was pretty reasonable given the circumstances.
- ggg9990 8y ago
  Your analysis assumes that WhatsApp cost $0 to maintain and grow and that 2-day old infants are using WhatsApp, and ignores the fact that the vast majority of WhatsApp users at the time of acquisition had not even paid the $1.
  - sunstone 8y ago
    True enough. But the factors you mention are round off errors and "not material" as a steely eyed accountant would say. At the time of the buyout the "conversion ratio" of those that paid the $1 after a year would have been well established.
    - ggg9990 8y ago
      It's more than that -- in many of their biggest markets (e.g. India) they waived the $1 fee entirely so all of their users there were free. So you can't really figure out the conversion ratio because it was never tried.
      - sunstone 8y ago
        Are you suggesting that Indians can't pay $1/yr? That would be... inadvisable.
        ggg9990 8y ago

rdtsc 8y ago

> also had to make a lot of promises. Some of those promises were even enshrined in the acquisition agreement: If Facebook imposed “monetization initiatives” like advertising onto WhatsApp, its founders’ shares would vest immediately, and they could leave without suffering any kind of financial penalty. That's pretty interesting. They foresaw it of course and put a claim in the contract about it. Though when trying to trigger it FB fought back so Acton left the money on the table. > Acton gave up some $900 million; Koum gave up about $400 million. You need to be really unhappy at work if you’re willing to quit a job that’s effectively paying you some $60 million per month, and from which you basically can’t be fired. A new type of "fuck you" money VC style - you can have your dirty stock options I am out of here. > or was he talked into breaking his promise by Sandberg and other executives looking covetously at WhatsApp’s unmonetized userbase? Either way, he has clearly failed a key leadership test. The leaders tend to aggregate around them minions who are an exaggerated version of themselves. If they are liars they will surround themselves over time with even bigger liars. If they are narcissists they'll end up with minions who are narcissists. It's mostly natural selection. Well it happened in this case, there was a clash and those who don't agree leave. Over enough years it "distills" the company culture into whatever characteristics the top leaders have.

bsg75 8y ago
> The leaders tend to aggregate around them minions who are an exaggerated version of themselves Is there a term for this behavior? It explains a number of situations.
- jessaustin 8y ago
  I don't know the answer to your question, but the proposition seems related to Conway's Law?
- pmorici 8y ago
  Birds of a feather flock together.
- notacoward 8y ago
  On the dark side of this, "a fish rots from the head"

sandov 8y ago

The problem is that there's not a good free and open source alternative to Whatsapp. Signal requires google services and phone number, Telegram doesn't encrypt by default, riot's interface is still not good enough. I can't redirect my non-techie friends to any alternative because none of them is good enough yet.

acct1771 8y ago
www.riot.im
- acct1771 8y ago
  Ah, didn't see you mentioned it because lowercase.
veidr 8y ago
I had the same problem recently. After failing to get my friends and wife to use Keybase (they tried it, but it just doesn't work on mobile beyond basic text chats with no image pasting). Requirements were: secure, iOS/Android/Mac/Linux/Windows, multi-person chats, and multiple simultaneous/alternating device support (that means chat history needs to propagate to my phones and computers). iMessage was not considered (because it supports only iOS & macOS) and WhatsApp was not considered (because Facebook). After looking at Signal, Telegram, Keybase, and Wire, we ended up using Wire. It's not perfect by a long shot, but it is better than the others we tested and AFAICT better than any solution currently available. But I had never heard of it until I really started looking around. https://wire.com https://wire.com
- Siimteller 8y ago
  Hi, curious about the "not perfect" part (I work at Wire) - what stuff would be prio for you to improve?
  - veidr 8y ago
    Hi! Okay sure, I will tell you! I am rooting for you guys. 1. Presence/active device detection. Often I am sitting right at my computer actively chatting with somebody, and yet my phone sitting on the desk right next to it is blowing up with notifications of the same messages I am replying to. 2. Too many features. I am constantly accidentally activating features like snapchat-style disappearing messages and weird alien voice effects. Cool if you have them enabled by default but I would like settings to turn OFF the many features that I literally never use (particularly on mobile where there are both small screens and more features, hence more icons). 3. 10-device limit. I know it sounds crazy but I have 2 phones and a few tablets and computers at work and home and I often have to delete a device to use the one I am at now. (20 devices would work for me; even 15 probably would.) 4. Initial log in / start up performance. I know it's hard with the huge photos and encryption. But sometimes i get a notification on my watch that my wife just said XXXXX and I want to respond RIGHT NOW on my computer. But it takes like 8 seconds on an iMac Pro to get to the active/ready state after booting the app. (I tend to just leave it open for this reason, but sometimes have to reboot or whatever and it is not). I would prefer it started up and let me send IMMEDIATELY even if I had to wait for it to load/decrypt the chat histories. Those are the main ones off the top of my head. It is a great product, though, and I appreciate your efforts!

pier25 8y ago

I'd love to move out of Whatsapp, but in Mexico and Spain literally everyone is using it. The other day I ordered take-out exclusively from Whatsapp. The company where I work recently implemented user support using Whatsapp. I buy coffee from a nearby roaster and he informs me the day before roasting so that I can get fresh coffee. I also know lots of parents that communicate with schools and create groups with other parents.

always_good 8y ago
Not to mention it will only become more entrenched since carriers at least here in Mexico don't count Whatsapp/Facebook towards your data usage, which is pretty awful if you were ever hoping for a competitor to emerge.
- pier25 8y ago
  Yeah, that too. :(
- jxsonl 8y ago
  Same for some SEA countries (Malaysia & Singapore), whatsapp (some includes other popular messaging apps such as WeChat, FB messenger) messages/calls does not count toward your data usage for most telcos and it is the main way people communicate, Whatsapp basically replaced SMS there when it was launched.

anilgulecha 8y ago

With Whatsapp's Acton investing 50MM in Signal, perhaps that's the way for the user-base to go. I only hope Signal will take steps proactively to not go down whatsapp's path (lucrative as it was).

shmerl 8y ago

Whatsapp was bad to begin with. Some non standard XMPP without federation and with very poor security. Irresponsible developers who created it, shouldn't have started such project.

Redoubts 8y ago

> What’s more, WhatsApp’s two founders both left hundreds of millions of dollars on the table, so keen were they to leave Facebook’s ad-friendly walls. (It turns out that their contractual right to being paid out in full would require them to sue for the money, and, according to the Journal, neither of them had the appetite for that.) Can I sue for it then?

lord_ring_11 8y ago
U can bet on other peoples property with credit default swaps, but unfortunately you can’t sue on behalf of others

duxup 8y ago

They bought the company, it's facebook's to do with as they wish. There was talk about independence but no indication that facebook was paying bazillions and were going to leave them alone for long. The founders even knew it enough to note the possibility of having ads forced on them in their contracts. I'm no fan of facebook, but justification is ... it is their product.

fjsolwmv 8y ago

Why is it Zuck's fault if he lets Sandberg monetize WhatsApp, but it wasn't Acton and Koum's fault for letting Zuck do it? How can it be Facebook's management's fault if they let 3rd party apps abuse FB user data, but not WhatsApp managements fault for letting Facebook do the same? Acton and Koum sold out their users for a huge payday, and now they are so rich that they can walk away from a few hundred million dollars to "buy an indulgent" for their immortal souls.

merricksb 8y ago

Ongoing discussion about WSJ article still on front page: https://news.ycombinator.com/item?id=17238241 https://news.ycombinator.com/item?id=17238241