WhatsApp had (depending on who you talk to) about 55 employees at the time of the acquisition. We learned from Techcrunch that the only investor, Sequoia had about 20% of the outstanding stock (with everything converted to Commmon).
So 55 people are splitting 12.8 billion dollars of value. Assuming a power log function (the founders have a big chunk and only 10% of the stock was owned by the 'rest' of the employees, 53 people, 10% of the 16Billion, is 1.6B$. That is roughly $30M per person.
How much attention do you think they are paying to their job, walking around in shock thinking "Holy shit, I'm freakin' rich now!" And trying to let that settle into their brains. Think about how it must feel, you're some employee and you're sitting there "worth" enough money that you can buy a house in California for cash and still retire easily with more "income" just from the interest than your current salary. So you're in a state of shock, and someone says "Hey, the site is down." and you say "Really? Oh look, I could buy that jet, its like only $5M. Hey look at this we could spend a week at this camp in Africa, or this I am so thinking it would be cool to hire a sailboat and crew to ferry us around the Great Barrier Reef in Australia, ..."
It will wear off, but the folks who experience it for the first time will never be the same.
It seems that people are running towards Telegram: "This is crazy. We'are getting 100 new registrations every second. Trying hard to prevent connection issues in Europe."
https://twitter.com/telegram/status/437313902058426368
One of the key tenets of Warren Buffett's theory of investment value is based around "moats" - businesses that can't easily be replicated. It's impressive how large WhatsApp has grown but it might be more remarkable how quickly another service can grow in its place. Barriers to entry are continuously falling in mobile and tech in general.
Viber has also been steadily growing along side WhatsApp. I think they had around 200M users last summer. A great thing they have that was not in WhatsApp is free VoIP calling.
This is pretty ridiculous. Whatsapp solved two important problems. It was the first non-SMS cross-platform messaging service for mobile (telephone number as address, etc), and carriers were (and still are) price gouging on SMS pricing. Whatsapp quickly picked up initial users because of this and growth accelerated as it benefited from the massive network effects of more and more users joining the service. It's not clear that Whatsapp has any major problems as SMS does that would allow an upstart to make a significant incursion into Whatsapp's user base. Whatsapp also has massive network effect now, the switching cost seems too high.
Counterpoint: as long as these trivial services are attracting $19 billion valuations, eventually someone is going to do the obvious rational thing, and pay new users $10 each to switch to their competing service. Lather, rinse, repeat, until equilibrium is reached.
You can pay users to join your service and download your app, but that doesn't mean they'll become monthly active users, which is the metric your business will be valued on.
This is a user acquisition tactic like any other - it doesn't get around the network effect that WhatsApp and others capitalize on to stay in the lead.
That's a pretty good idea. You could probably even do it for less, or in a way that guarantees usage over time - pay $1 per month they are active on the service and adding friends, over a year.
Especially since the bulk of WhatsApp users are reported to be in other countries. US $1 a month is likely to be a bigger incentive than it seems at first.
The switching cost is virtually nil. You install another app in parallel, tell your friends you like it so much more, and if it's better they start using it. Eventually you pay less attention to the first app, spend longer before replying to messages on there or not at all, and so on.
Whatsapp was completely destroyed in the Taiwan market about a year ago, simply because Whatsapp offered one year free while Line was free forever. When the year was up, people switched. People here laughed at the announcement - why would anyone pay 3 bucks for every person on Earth for a turkey like that? We weren't even willing to pay 2 dollars for ourselves.
Certainly in the UK, and most of europe, receiving SMS is free. Sending them might be 10-12p per message, but in practice contracts allow "unlimited SMS(sending)".
That's one of the reasons why I'd be hard pressed to use an application on a phone for sending messages - I already have that with SMS, and I don't need to know usernames, etc, I just use the contact number I already have stored.
But they don't actually need to use it just have it installed and you can message them. If they respond with a different app or a text message nothing breaks.
Exactly - I know numerous people who use multiple apps for messaging. Most of my US friends use iMessage and Facebook. But my UK friends use iMessage and whatsapp. It's no big deal to use more than one.
Except Whatsapp has a very strong network effect that's difficult to replicate (the other person must also have the app). That's why we designed Upptalk to interoperate with standard telephony services like SMS and SIP.
I disagree, network effects are incredibly strong. Since Telegram is only capable of talking to other Telegram apps, its value increases not only in proportion to the number of contacts who have it installed, but also how often you need to communicate with those people.
I don't have time right now to read all that, but since I was referring generally to network effects, and not specifically Metcalf's Law, the paper probably validates my comment above.
The paper is about the scaling of the value of a network from network effects as the network scales.
It validates your point in that the value of a network depends both on how many people are in a network, and the value that each gets from it.
But it supports what I said. A variety of ways of estimating the second factor in real networks finds that it tends to scale proportionately to log(n), hence giving a total value of O(n log(n)) for the network.
This is backed up by every way we could find to look at the problem, from the volume of mail delivered by the post office, to scaling laws that have been found to be ubiquitous in social networks.
Indeed, but users can easily have multiple apps installed and use them simultaneously, so it's not particularly hard for a user base to migrate over time -- having some friends on app1 and other friends on app2 isn't a huge deal for the most part...
[Most of these apps have already done this, by luring users away from SMS]
I read that Germans are really into the alternative messengers right now. My Facebook feed with old (non-techy) highschool friends is full of "Go Threema" or "You can reach me via Telegram".
It must be incredibly difficult to turn the whatsapp service back on after an outage, since most active users have probably sent a message that is waiting in the queue. Literally hundreds of millions of messages would hit the server once it goes up. Does anyone know how they handle this?
Actually this is the one of the things that annoyed me about WhatsApp - when it is down or you don't have a connection you can't queue messages to be sent. I frequent places without phone coverage (e.g. the Tube in London) and this was one of my big gripes.
On iOS Facebook, iMessage and SMS allow you to queue messages and "Retry" sending them when you have a connection (often in the wrong order). Surprisingly the best app for this is Skype which automatically resends them.
I'm pretty sure whatsapp does that - just tried sending a message while in flight mode, it appeared with a little clock to it, indicating it was going to be sent once back online.
You've been using WA for 2 years and haven't noticed any issues? You obviously haven't been using it much. Regularly whatsapp has short issues where messages will not go through, this is just a particularly long one.
These accu-hires are getting out of control. (a little bit of quick math says that each employee was worth a bit less than 300 million dollars to Facebook.
Looks like they're taking Telegram down with them.
It seems to me that the already massive rate at which WhatsApp users were fleeing to Telegram has accelerated to the point Telegram can't handle it anymore either.
For example, the "remove account" is not as efficient (for example, there's extra locking performed), and since removals are thought to be rare nobody bothered with its performance.
I'm surprised no one's mentioned Kik. It's a great platform, and lots of users are switching to it now because of this aquisition. I think lots of people who are privacy conscious will make a move away from WhatsApp/Facebook in the next few months.
What about BBM? Kik completely copied BBM (the founder was an ex employee). BBM is a lot better in many ways, including real groups. Strange seeing BBM not try and capitalise on this purchase of Whtasapp by Facebook.
this is a bit weird. it should be unrealted and way too soon for microsoft to get their hands on it and two data points a pattern does not make, however:
fairly reliable skype had a big outage the WEEK microsoft bought them and now WhatsApp is having a big outage days after Microsoft bought them.
Best case it's a poor omen.
Seeing how this will be a thread filled with witty jokes and Telegram fans, may I ask what Telegram their deal is? They do not intend to generate revenue yet put so much effort in marketing, securing and even payouts to breaches. Why? What is the cause? I might be one of these tinfoil hatters to some, but isn't this fishy? Why spend millions of dollars on yet-another-chatapp which can literally be replaced within days when a brand new app with some edgy feature gets out.
The (only/main) advantage of Telegram over Whatsapp is for me: They have an open API, such that I can get a desktop client. (There is already a commandline version for linux)
Also in principle there is end-to-end encryption, which is not a reason I switched. I'm not sure if this feature has been there when the 200k crypto contest went up with its criticism, but in principle it should be completely dependent on the client, which is opensource.
Too bad XMPP/Jabber did not get a breakthrough, what is the reason for that? No user friendly client? Noone putting enough advertising into it; you can't make money with it?
In germany there is currently a hype of Threema. Every magazine and newspaper writes about it being secure with end-to-end encryption. Even IT magazines just write naively about it, ignoring completely that it's closed source and noone can even see slightly behind the curtains.
I rather prefer to see/know the flaws (Telegram) than use a proprietary solution that makes the masses "feel" good. See also: https://news.ycombinator.com/item?id=7281338
Even that Threema costs some money makes people more confident of its security, with the reasoning that with a free solution you are not a customer but rather the product and you pay with your data.
The desktop client/multiple platform thing is so huge, I don't understand why WhatsApp, for instance, avoids this.
My group of friends uses a lot of iMessage, and I really hate the fact that I can neither use an iMessage app sitting in front of a Windows/Linux machine, nor can I use the iMessage app to view/respond to SMS from people who don't have iOS devices.
Who wants to take your phone out of your pocket and hunt and peck on a tiny keyboard when you can just type ~80 wpm on the computer in front of you?
Why not? By virtue of my profession, I spend many hours in front of a computer during the day. Every time I receive a text -- which is pretty often, I'm wishing I could read respond on the device I'm currently using, instead of switching screens/keyboards.
What would make someone prefer using the other device?
One of the main reasons I stick with Google Voice for my primary number is so I can send and receive SMS messages from a computer with a keyboard. There's a Windows 8 app so I can use it on my desktop and Surface natively, and it works well enough on my iPhone too, so it's everywhere for me.
I wouldn't even consider replacing that with WhatsApp, specifically because they don't have/allow clients on desktop/laptop devices. As in, I thought about checking WhatsApp out, searched for info on desktop clients, a Trillian plugin, or something, and immediately ruled out using it at all based on the lack of those things.
Don't know why this is being downvoted, because it's probably true. Maybe not for the crowed of HN, but outside of that a lot of people use phones/tablets a lot more than laptops - especially younger people.
I think there were two major technical issues stopping the overwhelming adoption of mobile XMPP/Jabber:
1) Apple push notifications were the only method of reliably delivering on demand messages to iOS devices, so to provide expected (app in background) behavior on iOS, someone had to provide an always on proxy between XMPP and iOS push notifications, and that proxy had to have your credentials. This required ongoing expense on the server side combined with a client side app.
2) XMPP is connection oriented and doesn't handle the disruption of disconnections and changing IPs/networks when a mobile device roams or transitions from wifi to cellular data.
On the political side, I think GTalk had, by far, the largest network of XMPP users. As I understand it, they've tried to solve some of these problems with proprietary protocol changes which resulted in the Hangouts app and the subsequent dropping of full XMPP support by google: https://www.eff.org/deeplinks/2013/05/google-abandons-open-s...
So 55 people are splitting 12.8 billion dollars of value. Assuming a power log function (the founders have a big chunk and only 10% of the stock was owned by the 'rest' of the employees, 53 people, 10% of the 16Billion, is 1.6B$. That is roughly $30M per person.
How much attention do you think they are paying to their job, walking around in shock thinking "Holy shit, I'm freakin' rich now!" And trying to let that settle into their brains. Think about how it must feel, you're some employee and you're sitting there "worth" enough money that you can buy a house in California for cash and still retire easily with more "income" just from the interest than your current salary. So you're in a state of shock, and someone says "Hey, the site is down." and you say "Really? Oh look, I could buy that jet, its like only $5M. Hey look at this we could spend a week at this camp in Africa, or this I am so thinking it would be cool to hire a sailboat and crew to ferry us around the Great Barrier Reef in Australia, ..."
It will wear off, but the folks who experience it for the first time will never be the same.