Facebook is reportedly paying $16 billion in cash and stock
to acquire WhatsApp – a company founded by the Ukrainian born techie Jan Koum.
Here are a few stunning facts about the company:
“WhatsApp has taken
little outside investment — only $8 million from Sequoia. As of December 2013,
WhatsApp only employed 50 people, most of whom are engineers. Their company
does all its development in Russia, where there is cheap talent.”
Good analysis of the buyout can be found here:
http://www.economist.com/news/business/21596966-why-mark-zuckerbergs-social-network-paying-such-whopping-sum-messaging
Built-in network externalities imply huge rewards for successful
tech firms. As Rajan noted in the op-ed below, this creates a winner-take-all
dynamic.