Comment by simgt
2 months ago
Yes, and Whatsapp was just a messaging app with a stupid Erlang backend. These deals are not about the tech, they buy the business, that includes the brand and the user base. Whether we think it's worth that amount is indeed up for discussion.
Whatsapp was much much more at that point. It also had a huge userbase at a time when getting such a number of people was incredibly difficult. Many were also paying the $1 per year fee. Switching from Cursor to Kilo etc. takes nothing. There are no "friends" you need to convince to switch.
Yes. But unlike cursor, Whatsapp had the following advantages:
1. It's cheap to run.
2. It has clear advantages over existing technology (SMS).
3. My mom uses it. She's never going to use cursor. Whatsapp had a huge userbase in Europe. Basically everyone I know uses it.
And it was "only" ~$20 billion. Inflation can't be this high.
I feel like people are underestimating the market share of Cursor.
The value in acquisitions for investors typically comes from how much money is locked into multi-year deals. A lot of tech folks in leadership positions that I talk to are very aware that the best option in this space changes every 2 months. Right now it's Claude. Next month it might be Codex. A couple months after that it could be Gemini/Qwen/Composor/Kimi/xAI.
Locking in with Cursor where quick swapping your team between the changing options is the point is a better choice than locking in even a 1 year deal with any single option where you're still going to be paying for token cost on top of it.
> And it was "only" ~$20 billion. Inflation can't be this high.
While I'm not sure about this buy, Cursor does at least have revenue. WhatsApp was basically running on VC/private money (they had an extremely nominal fee, but I never had to pay it), and was sold to buy its userbase into the Facebook fold. I don't think you can compare that to a business that at least has some decent revenue.
If Whatsapp is burning through say ~$1B yearly with zero revenue and Cursor is burning through say ~$2B with a ~$1B revenue, they're both still in the hole.
I wish people would stop talking about just revenue. It's mostly meaningless without knowing their expenses.
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WhatsApp was actually profitable pre-acquisition and they never needed the VC money. It was still in the bank + more when they got acquired
WhatsApp had real network effects built in, and network was the moat. Don’t think Cursor has any real moat.
The cost of switching from WhatsApp to an alternative is huge. You will lose access to your family, friends, whomever you chat with. They need to switch with you and in turn their friends need to switch with them, and so on.
The cost of switching from cursor to codex or Claude code is minimal.
So what does Claude code actually have that spaceX can't imitate? Well, not much, but acquiring hot companies before your IPO is a good strategy to drive up your own valuation.
Whatsapp was already the de-facto communication standard for a lot countries in America and Europe when Meta bought it.
I wonder if meta will ever buy the (non-chinese) asian equivalent, Line
(non-chinese) asian equivalent of whatsapp is still whatsapp, it completely dominates in some of the biggest asian countries like india, indonesia or pakistan along with a bunch of other smaller places