Why WhatsApp Founders Exited Facebook Leaving $1.3 Billion On The Table: The Expensive Split

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In the wake of the recent, ugly and expensive split between Facebook Inc. (NASDAQ:FB) and its biggest-ever acquisition, WhatsApp, many hot-news have been emerging. One such report by Wall Street Journal states that with the long-standing dispute over ads and revenue generation, WhatsApp’s co-founders Brian Acton and Jan Koum gave up $1.3 billion by leaving Facebook before they were eligible for stock awards.

While Brian Acton withdrew from Facebook in September last year, leaving about $900 million (Rs. 6,000 crores) on the table, the co-founder and Chief Executive, Jan Koum is also following the foot mark of Acton and has left Facebook, leaving behind $400 million of Facebook stock. Although, the show-up-and-get-money thing could have continued, still both the men decided opting to be free, rather than sticking in for few more months. They could’ve owned the stock, had they stayed till November.

The world’s second most popular messaging app creators have been duly critical of digital advertising. Their contract mentioned a clause, which allowed for accelerated payouts in case Facebook four-flushed on making any “additional monetizing initiatives.

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Reports also dramatize the trivial clashes between WhatsApp and Facebook over bathroom designs and desk sizes, which nonetheless, intensified.

Sour Breakup Between Facebook And WhatsApp

Facebook marked its biggest acquisition – Whatsapp – in 2014 for $19 billion. However, the matter started worsening since the founders didn’t get the stock at once. As a matter of fact, they were provided with the stock over a period of four years, that too with, stock vesting of the specified amount. However, with acquiring their pro-rated stock for the first three years, Acton and Kaum gave up on the entitled-stock they had to receive, had they stayed in for four complete years.

Koum and Acton have always been fiercely against showing any advertising on their messaging app. Instead of making money through ads, WhatsApp used to charge users a fee of $0.99 a year, for continuous usage. When Facebook acquired Whatsapp, it assured the messaging app of complying with their aversion towards showing ads and won’t force to run them. However, in the long run, Facebook persuaded Whatsapp to share user data and start showing ads. This was the peak-point, where things started going wayward.

Facebook executives decided about showing ads within WhatsApp’s Status feature. When these talk overran and spread like wildfire, Acton gave up nearly $900 million in stock and aborted his drive with the social-networking behemoth. Following him, Koum quit as well, giving up nearly $400 million in stock.

On Account of Skin-deep Issues:

The business model disparity wasn’t the only cause – aside from being one of the many causes. There were internal squabbles, over matters as petty as it can be. One such case in point is the dissatisfaction of Whatsapp founders over there office.

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Pettifogging continued its stride beyond nit-picks over desk amenities. The small spats flattened out a red carpet for bigger problems, in the workplace culture.

Heedless to the Spat:

As per reports by CNBC, Acton has not back-stepped in showing his repugnance towards Facebook’s advertising business model. The co-founder of Whatsapp vented out his distaste on Twitter and urged people to delete their Facebook profiles, with popular #deletefacebook.

The hashtag has been trending, amidst all the furore of Facebook’s links to controversial data firm, Cambridge Analytica and data leak scandals. To add up to the misery, Facebook’s stock has fallen by 10% since the revelations and has gone into chapter 11.

This move by Whatsapp Co-founder didn’t go unaddressed by Facebook executives, one of whom called it “low class.”

With Facebook scrambling to make money through profitable advertising, and Whatsapp Co-founder’s long-held distaste towards advertising, such spats seemed inevitable. As oF now, Acton and Koum have portrayed noteworthy conviction, by leaving as much as billions of dollars of invested stock, in their pursuit to defy advertising benefits.

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