The $19 billion deal to sell hatsApp Inc. to Facebook Inc. (FB) started at Yahoo! Inc. more than five years ago, when Jan Koum became disillusioned at the way Internet companies were fixated on advertising.
The partners are old enough to remember the first dot-com bust. Acton, 42, grew up in Michiganand was employee No. 44 at Yahoo, working on advertising, shopping and travel services, according to Wired. He invested during the boom and lost millions of dollars when the market imploded, according to Forbes.
The two founded WhatsApp later that year with the idea that smartphone users should be able to easily message each other without incurring fees from phone carriers. The service is free for a year, then costs 99 cents per year after that.
He left Yahoo in 2007 with one of the company’s other engineers, Brian Acton, and started a company by 2009 that shuns advertising altogether. The strategy allowed them to concentrate on creating an easy-to-use messaging product instead of developing new ways to glean customer information for their marketing pitches.
WhatsApp doesn’t collect information like name, gender, address or age. Instead, users are approved after their phone numbers are authenticated.
Their approach paid off. WhatsApp amassed 450 million monthly users -- twice as many as Twitter Inc. -- who send billions of messages a day. Yesterday, Facebook Chief Executive Officer Mark Zuckerberg bought their five-year-old company in the largest Internet deal since Time Warner’s $124 billion merger with AOL in 2001, a deal that will almost certainly make Koum and Acton billionaires several times over.
Koum will join Facebook’s board of directors once the deal goes through. Facebook declined to make him or Acton available for an interview.
Once Facebook Rejects Him,
" After exiting Yahoo, Acton said on Twitter that he was turned down for a job at Facebook in 2009."
“There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product,” he said.
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