Latest News & Current Events

The significance of Facebook's $19 billion WhatsApp offer

While many in the tech world are having a hard time swallowing the $19 billion sticker price that Facebook offerd for WhatsApp what is clear is that in order to compete with Google and Apple in the mobile space, Facebook has decided that its core strategy will be to create or buy up must-have apps that consumers demand to have on their mobile devices.

The only thing more stunning than WhatsApp's $19 billion price tag is the incredible journey of the messaging app's CEO Jan Koum.

Koum was raised in Ukraine, immigrating in the early 1990s to the United States when he was a teenager.  For Kourn, living on welfare and food stamps, telephone calls back home to Ukraine proved to be a daunting expense, until Skype -- now owned by Microsoft  - changed all that, dramatically reducing the price of international calls. Kuom set out to do the same for text messaging on mobile phones.

By his own account, Koum "barely graduated" high school in Mission Viejo, California. He went on to study at San Jose State University, but dropped out. Koum worked at Ernst & Young as a security tester and later became a security and operations engineer at Yahoo.

In 2009, he founded WhatsApp, with coworker Brian Acton. Acton had previously been turned down for possitions at Facebook and Twitter

The WhatsApp service has amassed 450 million users in four-plus years and is growing its user base by 1 million people a day. WhatsApp's users are just the kind of customers Facebook is looking for. They are extremely active, sending more than 600 million photos a day -- more photos than Facebook users upload. A whopping 70% of WhatsApp users are active every day. By way of comparison, 62% of Facebook users are active daily.People around the world send 19 billion WhatsApp messages per day, including 200 million voice messages and 100 million videos.

Even more important WhatsApp has a strong presence internationally, particularly in Europe, India and Latin America. Those are regions where Facebook is trying to grow its base of users. WhatsApp and other mobile messaging services also are widely used by teens and tweens, a group that has notoriously been ditching Facebook for rival services, including text message services and Snapchat.

Despite creating such a wild success, Kuom has shied away from the spotlight. He passes up television appearances and rarely gives interviews. His prestigious CEO title isn't even listed on his social media accounts. On his LinkedIn profile he lists himself as WhatsApps's "QA Tester." He previously said he was the company's "Sr. Tweet Manager."

Koum owns 45% of WhatsApp, according to Forbes. That means when the deal closes with Facebook, his net worth could be close to $7 billion.

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