When Facebook announced that it was buying WhatsApp for $US19 billion, the first reaction from most people was shock.
After they picked up their jaws from the ground, and digested the acquisition, eventually they started to wonder why Google didn’t buy WhatsApp. After all, Larry Page likes to think big, and there was gossip of Google’s interest in WhatsApp a year ago.
Well, it turns out Google did want to buy WhatsApp, it just failed.
“More than six months ago, Google approached WhatsApp with an odd offer: It would pay the mobile messaging startup in exchange for the right to be notified if the messaging app entered into acquisition talks with other companies, according to a person involved in the process and two people briefed on it.”
The highly unusual right-to-know offer was worth millions of dollars. WhatsApp rejected that deal.
Efrati says this idea comes from Google’s head of M&A, Don Harrison. After Google got beat in the Instagram sale, it wanted to figure out a way to get an inside edge on acquisitions. So, he concocted a plan to buy shares of a company in exchange for a heads up on sales.
Jessi Hempel at Fortune has more details. She says Google offered $US10 billion for WhatsApp. And it didn’t offer a board seat to WhatsApp’s CEO.
Obviously, this was a no-brainer for WhatsApp. Facebook made an offer that was twice as big, and it moved in a much more decisive way.