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TITLE: Facebook to Buy WhatsApp, 948GUEST: Jessica Lessin

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It's Thursday, February 20, 2014 and this is Tech News Today.

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This episode is brought to you buy SCOTTEVEST, technology-enabled clothing to carry all of your gadgets. Visit Scottevest.com/twit now through February 24th to save 40% off 14 of their bestsellers. That's Scott E Vest dot com slash TWIT, and use the code TWiT 13 at checkout.

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Welcome to Tech News Today, I'm Mike Elgan - I'm Jason Howell.

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[me] Tech News Today explores the most important stories of the day in conversation with the world's leading journalists.

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Our guest today is Jessica Lessin, the founder and Editor-In-Chief of The Information. <Talk about ad-free subscription model.>@Jessicalessin

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http://bridgeurl.com/tnt948/all

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CONVERSATION 1SHOWLINKS

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Facebook plans to buy WhatsApp for as much as 19 billion dollars. The Silicon Valley-based messaging app has 450 million users. The app costs 99 cents a year to use, but the first year is free. Facebook will pay 4 billion dollars in cash plus 12 billion dollars worth of Facebook stock. WhatsApp employees and founders will also get 3 billion dollars in restricted stock units that will vest over four years. http://dealbook.nytimes.com/2014/02/19/facebook-to-buy-messaging-start-up/http://www.bloomberg.com/news/2014-02-19/facebook-to-buy-mobile-messaging-app-whatsapp-for-16-billion.html

http://online.wsj.com/news/articles/SB10001424052702304914204579393452029288302?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304914204579393452029288302.html

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Reed Albergotti is a technology reporter with The Wall Street Journal. *

Q: Why did Facebook make this deal?
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Q: Why did WhatsApp make this deal?

* Facebook = strategy of having a lot of apps

* Facebook = 1.2 billion users globally

* Why continue to operate it independently?

* WhatsApp = 72% active every day

* Probably share more photos than Facebook

* WhatsApp = doesn’t collect names, ages, genders or addresses; doesn’t store users’ messages on its servers.

* WhatsApp = does collect phone numbers

* Competes with = Line, Kakao and WeChat in Asia to Kik and BlackBerry Messenger

* There are about 50 messaging apps with more than 1 million downloads on Google Play

* Estimates = seven trillion messages sent on WhatsApp a year

* Founders Jan Koum and Brian Acton, former Yahoo employees

* Jan Koum = “Monetization is not going to be a priority for us”

* Two companies held informal talks for two years

* Koum and Zuck negotiated over a plate of Valentines Day chocolate-covered strawberries intended for Ms. Chan.

* 55 employees

* Deal = $344 million an employee, or about $28 a user. (Others say $42 per user.)

* Largest acquisition ever of a venture capital-backed start-up

* Facebook had $7.9 billion in revenue last year

* If the deal isn’t completed, Facebook will pay WhatsApp $1 billion in cash and $1 billion in stock

* WhatsApp co-founder and CEO Jan Koum will join Facebook's board

* Sequoia invested about $60 million and is getting $3 billion

* WhatsApp doesn't employ any marketing or public-relations people.

* Jan Koum having lived on food stamps

* Brian Acton having been rejected from jobs at Facebook and Twitter

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The Wall Street Journal * @ReedAlbergotti

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CONVERSATION 2SHOWLINKS

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Facebook wasn’t the only deep-pocket Silicon Valley giant interested in grabbing WhatsApp. In an exclusive written by The Information’s Amir Efrati, we learned that Google took an unusual approach to WhatsApp -- an approach that, well, didn’t work out so well. https://www.theinformation.com/Google-s-Unusual-Offer-to-WhatsApp

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Q: What did Google do to try and make sure a company like Facebook wouldn’t acquire WhatsApp?

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Q: Why wasn’t WhatsApp more interested in working with Google?

Q: How common are “right-of-notice” offers in the valley?

Q: How big of a loss is this for Google?

Q: Google was surprised by Facebook’s Instagram acquisition, too, weren’t they?

Q: It goes both ways, right? Facebook really wanted DeepMind, which Google aquired recently.

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CONVERSATION 3SHOWLINKS

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Yahoo is funding research to develop a Siri-like virtual assistant. The company has made a 10 million dollar grant to Carnegie Mellon University for a project called InMind. http://www.technologyreview.com/news/524401/yahoo-launches-10-million-research-effort-to-invent-a-smarter-siri/

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Jason Abbruzzese is a reporter for Mashable.

Q: What do we know about the InMind project so far?
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Q: Is there other funding besides Yahoo’s grant?

Q: What rights over the end product does the grant give Yahoo?

Q: It’s a five-year project. Isn’t that a little late to catch up with Siri and Google Now?

Q: Why doesn’t Yahoo just buy a startup?

Q: The two principal researchers behind this project started out with CALO, which is where Siri came from, right?

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mashable.com * @JasonAbbruzzese

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CONVERSATION 4SHOWLINKS

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Microsoft changed the name of its Office Web Apps to Office Online, plus added some new features. http://news.cnet.com/8301-10805_3-57619180-75/microsoft-relaunches-office-web-apps-as-office-online/

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Lance Whitney writes for CNET.

Q: First, why did they change the name?
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Q: What else is new with Office Online besides the name?

Q: They changed the interface, too, didn’t they? Is this an improvement?

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cnet.com * @lancewhit

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CONVERSATION 5SHOWLINKS

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HTC is working on three smartwatches. The company is planning to preview them privately to carriers at next week’s Mobile World Congress in Barcelona, according to a report from Bloomberg. http://techcrunch.com/2014/02/20/htc-3-wearables/http://gigaom.com/2014/02/20/htc-google-now-smartwatch/

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* One based on Google Now

* Another based on Qualcomm’s Toq (TALK) smartwatch, which was kind of a reference design

* Another described as “a music-playing bracelett”

* HTC has not decided if it will publicly demo any of these wearables next week

* HTC chairman, Cher Wang, told Bloomberg HTC would release its first wearable device by Christmas

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More Information

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FOLLOWUP

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We reported Tuesday that Apple’s mergers and acquisitions chief met with Tesla CEO Elon Musk. Yesterday, Musk confirmed the meeting, but refused to say whether the talk was about Apple buying Tesla. He did say that the acqusition of Tesla by any other company is quote “very unlikely.”

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Thank Jessica Lessin.

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* * * FIN * * *

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On Tech News Today: Facebook will buy WhatsApp * Yahoo is working on a Siri-like assistant * And HTC plans to announce a smartwatch that runs Google Now.

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