How ugly was the breakup between Facebook Inc. and the two founders of WhatsApp, its biggest acquisition? The creators of the popular messaging service are walking away leaving about $1.3 billion on the table.
The expensive exit caps a long-simmering dispute about how to wring more revenue out of WhatsApp, according to people familiar with the matter. Facebook has remained committed to its ad-based business model amid criticism, even as Facebook Chief Executive Mark Zuckerberg has had to defend the company before American and European lawmakers.
Felix Salmon, Slate:
WhatsApp wasn’t an easy acquisition for Zuckerberg, because the two apps have very different founding principles. Koum, who grew up in Ukraine, believes deeply in privacy; Zuckerberg thinks that the more open and connected we are, the happier we all become. And so in order to acquire WhatsApp, Zuckerberg not only had to pay a lot of money and give up a board seat to Koum; he 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.
Thus did WhatsApp retain exactly the independence that it had been promised — until it didn’t.
It’s hard to feel sorry for WhatsApp’s founders here. They sold their privacy-focused anti-advertising profitable business to a company that is known for its privacy-ignoring advertising practices. It’s like if a band acclaimed for its artistic integrity and dedication were to get the Chainsmokers to write and produce their next album — how else would you expect it to turn out?