They should never have needed to even consider buying WhatsApp...I will never understand why Microsoft killed of there Messenger platform. I guess you could say because they bought skype and didnt want fragmentation, but skype served an entirely different use case. When it was still around I had the IM app on my phone and it was fine. Expanding it to lower end phones and supporting the social community would have done it.
--EDIT-- Microsoft reported the service attracted over 330 million active users each month, placing Messenger among the most widely used instant messaging clients in the world. [1]
I've never used it but I was under the impression that Microsoft had not killed off their Messenger platform, just MSN Messenger? They still run Lync which is the business-oriented platform and where they stand to make actual money.
They were likely making good money off the Windows Live Messenger (It's final name by the time it was killed off) because it had so many users, and was serving advertisements to all desktop users.
There's still some kind of enterprise messenger that Microsoft sells. I don't remember the name of it, but I've seen it very recently in several organizations.
Office Communicator/Microsoft Lync. I can't speak to Lync (the current iteration), but Communicator, while functional, leaves a lot to be desired. I use a Mac at home. Spell-check everywhere is awesome, MS can't figure out how to unify their UIs so that useful little features are accessible everywhere. In theory it's nice because it plays well with Exchange. However, different organizations in a large corporation with their own Exchange servers may or may not be able to communicate with each other over it. And it seemed to go back and forth daily. And a ton of small UI misfeatures that make it unpleasant to work with as a communications medium (IMO, again, beter than nothing, but worse than many other options).
It wasn't that much money, but it was a user base that was leveraged many times, and that they could keep on leveraging. By killing Messenger, they disconnected users' ombilical cord to the MS social network, whatever that is.
The best part about the Mac client is that it stops me from shutting down my computer (have to mash op-com-esc each time I forget to try to kill lync before shutdown)
I think the tough part would be making the transition onto mobile, and integrating the SMS/calling aspect into it. Yes, you've got the brand with MSN Messenger, but expanding that takes a vision of communications that I don't know MS had c.2009 when they would've needed to launch.
From what I recall, in the 2009 era you could actually get feature phones with MSN Messenger pre-installed here in the UK and it was actually advertised as a feature by mobile providers. Microsoft just lost interest.
Gates praised Zuckerberg’s drive, but described him as “more of a product manager”, insisting that he was more of a coder starting with architecture where Zuckerberg “starts with products, and Steve Jobs started with aesthetics.”
Which, in my view, expresses where my main concerns about facebook's future lie (if I were an investor, I guess).
When Facebook introduced its plan to be a platform for developers to work on, I loved the idea. It reminded me of Yegge's post on Amazon, and seemed to me like a great way for Facebook to evolve to be the 'social layer' of the web.
Of course, they torpedoed that whole effort and kept going with their walled-garden facebook-as-a-product approach.
And now that Facebook seems to lose some momentum/popularity (or is perceived to be, which is still bad), they end up implementing part of the 'platform model' anyways, except still within their walled-garden with facebook-made apps.
It's quite possible that I'm missing the real reason why they are taking this approach, but seeing Zuckerberg as a product-first guy might be a partial explanation.
From what Zuckerberg said at Disrupt in 2011 it seemed like the Facebook-as-a-Platform strategy was the plan they would have stuck with if not for mobile. They knew they had to make a huge switch to mobile or they'd be forgotten before their IPO, and the locked-down simple nature of mobile ecosystems turned them back towards Facebook as product(s).
What exactly is the difference between developers integrating mobile apps with facebook, and developers integrating websites or web apps? In fact, mobile apps can make it easier (and safer) for users to link to facebook.
In fact, what with the need to develop apps that pull from the same source as the website, they probably had to focus more on the (private) API anyways.
Or was it more a matter of development priorities?
I too loved the idea, but I think Facebook's naive implementation of it ruined it for them.
In the early wave of Facebook apps there was a lot of stuff built that users hated. In 2010, when my cofounder and I started doing user tests of some Facebook app ideas, it turned out that people were very averse to using new apps. If you use a regular app and it sucks, you remove it. But if you used a Facebook app and it does something bad, you look like an idiot in front of all your friends. It was a classic tragedy of the commons: the viral behaviors that made early apps successful rapidly depleted the goodwill of users. And people didn't blame the obscure companies doing the BS; they blamed Facebook.
The lesson we took from our user studies was to build something that was an external website, and only mention Facebook integration once we'd had a chance to get them more comfortable with us. And I'm sure the lesson Facebook took was "don't let other people ruin our brand".
Indeed. I spent two months on a feature that was basically 'push every pageview of x to the user's timeline', and facebook understandably removed that feature just before launch.
However, it still doesn't really make sense to me. First of all, why not just remove the abuse, or implement more app-store like curation to ban abusers. And second, they didn't really seem to be too committed from the start, what with the constant API changes that broke stuff left and right.
That doesn't contradict the parent's comment. In Facebook's hands that future cashflow may be significantly large than in Microsoft's.
Also in a case such as this the value of the investment is the difference between the expected future cashflow of Facebook alone and the combination of Facebook and Whatsapp (as ownership of Whatsapp may increase cashflow at the original Facebook part both through removal of competition and also driving usage).
Am I the only one who switched completely to email and cloud storage? Who uses SMS anymore, email uses the data connection and you can upload/download gigabytes on GDrive/OneDrive (former SkyDrive, Microsoft is at it again).
I just see WhatsApp's value dropping as more and more people switch to actual smartphones...
Part of the reason it sold for $19B was because Google, Facebook, and Microsoft were interested. Narrow that down to one bidder, and all of a sudden you have an app that sells for millions instead of billions. The power that comes with being wanted by more than one party is incredible...it is the reason why Mozilla was able to triple their payout from a company that had already built a worthy competitor.
While multiple bidders juiced the price, saying it would be millions instead of billions is just terrible logic.
WhatsApp had incredible value just through the user base alone, especially considering its diversity in the global market (relative to FB who is strong in what we consider the 'west' but not the far east).
If there are no other bidders it still sells for many billions and probably north of 10.
If there are no other bidders, it either sells for what the founders/VCs value it at, or it doesn't sell at all. So you are right, that if Koum/Acton valued it at billions and could convince some company that it was worth billions (while not having the "proof" that anybody else valued it at billions), then it would sell for billions. Not having proof is a pretty poor negotiating position through.
They were profitable and cash-flow positive, so they just wouldn't sell at all and choose to remain independent.
The story of how they sold the company has been reported in the press, and the valuation was arrived at via comparison with Twitter's $30B public-market valuation. WhatsApp had roughly 2/3 as many users as Twitter; they are in similar industries, so it makes sense that its valuation should be roughly 2/3 as much.
Nope. "Facebook said it will pay WhatsApp $4 billion in cash and $12 billion in stock. WhatsApp's founders and staff will be eligible for for another $3 billion in stock grants to be paid out if they remain employed by Facebook for four years. Koum will also join Facebook's board of directors."[1]
The Rolling Stone interview that this story is based on is actually pretty fascinating - I recommend it: http://www.rollingstone.com/culture/news/bill-gates-the-roll.... While his opinions on the myriad subjects that interests him and his foundation can be argued and debated (and whose opinions couldn't, honestly), you cannot deny his pragmatism.
I am unsure how Microsoft would be able to leverage Whatsapp. It would be hard to use it to drive Windows Phone acceptance and it has negligible value as a desktop app.
I disagree that the value of a desktop is negligible - for me, the "killer feature" of facebook messaging, which I use the same way WhatsApp is used, is that I can type on my desktop with a keyboard when one is available, and continue the conversation on mobile when I leave my desk. SMS doesn't have that, nor does WhatsApp, but I find it very valuable.
Skype used to work well until ebay interrupted it. Now with MS, the bloated UI takes forever to load and I can't login for 3-4 minutes. If whatsapp can start in a snap on a mobile device and use so little background resource, why can't skype achieve that. The users will come automatically if you have a compelling product.
Loved this comparison of 3 visionaries of our times by one of the 3:
Gates praised Zuckerberg’s drive, but described him as “more of a product manager”, insisting that he was more of a coder starting with architecture where Zuckerberg “starts with products, and Steve Jobs started with aesthetics.”
Gates = sw engr; Zuck = Product Manager; Jobs = UX. (To add to it, I would say Page/Brin = research scientist.) These really reflect what each company has morphed into. MSFT ended up as the largest software company, FB is probably one of the most widely used product ever. Apple makes the best UI. And Google uses research ideas, spits them into beta products quickly and rinses and repeats.
What's especially interesting is how reviled the software engineer is on HN. Maybe always doing the next logical thing to improve the bottom line rubs people the wrong way - even those same types of logical people.
Yeah, the ruthless monopolist systematically destroying other software engineers' companies/products/work is the part of Bill Gates that people don't care for. His work after M$oft has been awe inspiring. How he got from where we are to where he is now was kinda gross.
Can you give us some examples of this "ruthless monopolist systematically destroying other software engineers' companies, products, work"? I am honestly asking, I would like to have this knowledge too.
"Embrace, extend, and extinguish",[1] also known as "Embrace, extend, and exterminate",[2] is a phrase that the U.S. Department of Justice found[3] was used internally by Microsoft[4] to describe its strategy for entering product categories involving widely used standards, extending those standards with proprietary capabilities, and then using those differences to disadvantage its competitors." From Wikipedia: http://en.wikipedia.org/wiki/Embrace,_extend_and_extinguish
I don't know what Microsoft did to you personally to make you so bitter, so I'll ignore your tone and address your comments in the spirit of the post you replied to - I think the point is, when looked at from the point of view of sound engineering principles, isn't that behavior somewhat logical? Having one common operating system is just exercising DRY, once-and-only-once architecture... and Microsoft's 'embrace/extend' approach to 'not-invented-here' reimplimentation? That's just pragmatic refusal to take third-party dependencies, which any engineer can probably relate to. You can object to how that behavior manifests itself in the market when taken to corporate scale, but at least consider the validity of the analogy.
Bill Gates is not "reviled" by HN. Some of Microsoft's practices in the 90s are, but it seems that most HN users have great respect for Gates as a hacker, founder and most of all thinker and philanthropist. Just look at any BG related thread here, you will see this (well deserved) respect.
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[ 4.3 ms ] story [ 142 ms ] thread--EDIT-- Microsoft reported the service attracted over 330 million active users each month, placing Messenger among the most widely used instant messaging clients in the world. [1]
[1]https://en.wikipedia.org/wiki/MSN_Messenger
Especially considering that it was one of the few Microsoft brands that actually had a positive image associated with it.
Gates praised Zuckerberg’s drive, but described him as “more of a product manager”, insisting that he was more of a coder starting with architecture where Zuckerberg “starts with products, and Steve Jobs started with aesthetics.”
When Facebook introduced its plan to be a platform for developers to work on, I loved the idea. It reminded me of Yegge's post on Amazon, and seemed to me like a great way for Facebook to evolve to be the 'social layer' of the web.
Of course, they torpedoed that whole effort and kept going with their walled-garden facebook-as-a-product approach.
And now that Facebook seems to lose some momentum/popularity (or is perceived to be, which is still bad), they end up implementing part of the 'platform model' anyways, except still within their walled-garden with facebook-made apps.
It's quite possible that I'm missing the real reason why they are taking this approach, but seeing Zuckerberg as a product-first guy might be a partial explanation.
In fact, what with the need to develop apps that pull from the same source as the website, they probably had to focus more on the (private) API anyways.
Or was it more a matter of development priorities?
In the early wave of Facebook apps there was a lot of stuff built that users hated. In 2010, when my cofounder and I started doing user tests of some Facebook app ideas, it turned out that people were very averse to using new apps. If you use a regular app and it sucks, you remove it. But if you used a Facebook app and it does something bad, you look like an idiot in front of all your friends. It was a classic tragedy of the commons: the viral behaviors that made early apps successful rapidly depleted the goodwill of users. And people didn't blame the obscure companies doing the BS; they blamed Facebook.
The lesson we took from our user studies was to build something that was an external website, and only mention Facebook integration once we'd had a chance to get them more comfortable with us. And I'm sure the lesson Facebook took was "don't let other people ruin our brand".
seven hells...
However, it still doesn't really make sense to me. First of all, why not just remove the abuse, or implement more app-store like curation to ban abusers. And second, they didn't really seem to be too committed from the start, what with the constant API changes that broke stuff left and right.
Also in a case such as this the value of the investment is the difference between the expected future cashflow of Facebook alone and the combination of Facebook and Whatsapp (as ownership of Whatsapp may increase cashflow at the original Facebook part both through removal of competition and also driving usage).
> Microsoft would have been willing to buy it, too. I don’t know for $19bn, but the company’s extremely valuable
I just see WhatsApp's value dropping as more and more people switch to actual smartphones...
No?
Unlikely. AFAIK, Chromebooks are selling very well.
Me and every single person I know...
WhatsApp had incredible value just through the user base alone, especially considering its diversity in the global market (relative to FB who is strong in what we consider the 'west' but not the far east).
If there are no other bidders it still sells for many billions and probably north of 10.
The story of how they sold the company has been reported in the press, and the valuation was arrived at via comparison with Twitter's $30B public-market valuation. WhatsApp had roughly 2/3 as many users as Twitter; they are in similar industries, so it makes sense that its valuation should be roughly 2/3 as much.
"Yo, Larry Page just bid X,XXX,XXX,XXX what's your offer, hurry cuz I might take it"
and then go to Larry Page and say
"Hi, Zuckerburg just bid XX,XXX,XXX,XXX what's your final offer, hurry cuz I might take it"
Sit back and watch valuation go up?
And their stock is more over-valued than MSFT's so that explains the differential.
[1]: http://money.cnn.com/2014/02/19/technology/social/facebook-w...
Skype used to work well until ebay interrupted it. Now with MS, the bloated UI takes forever to load and I can't login for 3-4 minutes. If whatsapp can start in a snap on a mobile device and use so little background resource, why can't skype achieve that. The users will come automatically if you have a compelling product.
Gates praised Zuckerberg’s drive, but described him as “more of a product manager”, insisting that he was more of a coder starting with architecture where Zuckerberg “starts with products, and Steve Jobs started with aesthetics.”
Gates = sw engr; Zuck = Product Manager; Jobs = UX. (To add to it, I would say Page/Brin = research scientist.) These really reflect what each company has morphed into. MSFT ended up as the largest software company, FB is probably one of the most widely used product ever. Apple makes the best UI. And Google uses research ideas, spits them into beta products quickly and rinses and repeats.