Linked List: February 19, 2014

Wednesday, 19 February 2014

Four Numbers That Explain Why Facebook Acquired WhatsApp 

Jim Goetz, writing on behalf of WhatsApp investor Sequoia Capital:

Jan keeps a note from Brian taped to his desk that reads “No Ads! No Games! No Gimmicks!” It serves as a daily reminder of their commitment to stay focused on building a pure messaging experience.

This discipline is reflected in WhatsApp’s unconventional approach to business. After one year of free use, the service costs $1 per year — with no SMS charges. This can save users trapped in expensive data plans up to $150 per year.

It’s easy to take this novel model for granted. When we first partnered with WhatsApp in January 2011, it had more than a dozen direct competitors, and all were supported by advertising. (In Botswana alone there were 16 social messaging apps). Jan and Brian ignored conventional wisdom. Rather than target users with ads — an approach they had grown to dislike during their time at Yahoo — they chose the opposite tack and charged a dollar for a product that is based on knowing as little about you as possible. WhatsApp does not collect personal information like your name, gender, address, or age. Registration is authenticated using a phone number, a significant innovation that eliminates the frustration of remembering a username and password. Once delivered, messages are deleted from WhatsApp’s servers.

The company only has 32 engineers on staff. So they have roughly 14 million active users per engineer, and the company’s acquisition price works out to $500 million per engineer. That’s simply astounding.

The article doesn’t make clear whether WhatsApp was running in the black, or what percent of those 450 million active users have signed up for the $1/year subscription. But it sounds like they’ve built a service that can profitably scale to serve everyone for just $1 per year, with no ads — through solid engineering, staying lean and mean staffing-wise, and focusing on simply making users happy through simplicity and reliability.

I don’t know if Facebook was smart to pay $16 billion for them, but bravo to the WhatsApp team for building something amazing, and cutting against the grain of the Valley’s conventional wisdom.

Facebook to Buy WhatsApp for $16+ Billion 

Mike Isaac, reporting for Recode:

Facebook plans to acquire the messaging service WhatsApp, the company announced on Wednesday.

The move marks the social giant’s biggest acquisition to date, as Facebook paid $16 billion in cash and stock for the company. In addition, the deal includes another $3 billion in restricted stock units for WhatsApp employees, which will vest over a period of time.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” Facebook CEO Mark Zuckerberg said in a statement.

That’s a lot of money.

Samsung Goes Back to Trashing Apple With Latest Commercials 

Chris Welch, The Verge:

After some innovative advertising campaigns, Samsung’s latest commercials once again find the company setting its sights on Apple.

I love that “innovative advertising campaigns” link:

  1. The ads in question were for the Galaxy Gear watch, a product to which Apple has no competitor.
  2. One of the two spots was widely panned as a blatant ripoff of Apple’s “Hello” commercial that ran during the Oscars telecast.
Steve Perlman Unveils ‘pCell’ Wireless Networking 

Cade Metz, reporting for Wired:

Steve Perlman is ready to give you a personal cell phone signal that follows you from place to place, a signal that’s about 1,000 times faster than what you have today because you needn’t share it with anyone else.

Perlman — the iconic Silicon Valley inventor best known for selling his web TV company to Microsoft for half a billion dollars — started work on this new-age cellular technology a decade ago, and on Wednesday morning, he’ll give the first public demonstration at Columbia University in New York, his alma mater. Previously known as DIDO, the technology is now called pCell — short for “personal cell” — and judging from the demo Perlman gave us at his lab in San Francisco last week, it works as advertised, streaming video and other data to phones with a speed and a smoothness you’re unlikely to achieve over current cell networks.

“It’s a complete rewrite of the wireless rulebook,” says Perlman, who also helped Apple create QuickTime, the technology that brought video to the Macintosh. “Since the invention of wireless, people have moved around the coverage area. Now, the coverage area follows you.”

Yes, please.

Google Suggests Dos and Don’ts for Glass Users 

Under “Don’ts”:

Be creepy or rude (aka, a “Glasshole”). Respect others and if they have questions about Glass don’t get snappy. Be polite and explain what Glass does and remember, a quick demo can go a long way. In places where cell phone cameras aren’t allowed, the same rules will apply to Glass. If you’re asked to turn your phone off, turn Glass off as well. Breaking the rules or being rude will not get businesses excited about Glass and will ruin it for other Explorers.

I’m thinking there’s a problem here, if Google needs to expressly tell people not to be creepy. Got to give them credit for embracing “glasshole” though.

(Via Nick Bilton, who got “glasshole” to run on the New York Times website, and who found the ideal photo to accompany his post.)

BlackBerry CEO John Chen Responds to T-Mobile’s Campaign Encouraging BlackBerry Users to Switch to iPhone 

This has turned into a controversy generating lots of coverage — just look at it all. But should anyone be surprised? BlackBerry is hemorrhaging users, their bet-the-company next-generation OS is a complete flop, and the company is heading toward bankruptcy. T-Mobile is thinking, “Hey, if these customers are going to switch, let’s make sure they switch to another phone but stick with us as their carrier.”

It sucks to be BlackBerry, but T-Mobile didn’t do anything “outrageous”.

AnandTech: The Pixel Density Race and Its Technical Merits 

Joshua Ho:

While 1440p will undoubtedly make sense for certain cases, it seems hard to justify such a high resolution within the confines of a phone, and that’s before 4K displays come into the equation. While no one can really say that reaching 600 PPI is purely for the sake of marketing, going any further is almost guaranteed to be for marketing purposes.

A few readers have pointed out the similarities to the megapixel race in the camera industry, which has thankfully subsided. Only up to a certain point is higher pixel density definitely better.

‘The Semicolon’s Breezy Informality’ 

Matthew Kassel, writing for The New York Observer:

A period could very well have worked there, but as Ben Crair observes in the New Republic, they often seem too severe; and exclamation points, the kudzu of punctuation in the digital age, might make you feel like an overenthusiastic phony. But the semicolon’s breezy informality, for me, captures the unstructured, colloquial nature of digital correspondence more so than any other punctuation mark out there.

(Via Felix Salmon.)