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.

I think revenue is common to talk about because profit is also meaningless when a company spends every penny it earns to grow (new engineers, marketing, etc). Iirc Amazon made zero profit for quite some time.

Also revenue is a signal for product market fit. Is it a great one? Dunno. But for example I'd be hard pressed to sell $1billion of anything, even if I had something everyone wanted.

But I think your point about burn rate is important. How long can they have this attrition on cash before they collapse?

I mean, the financials just don't look great either way.

Their main product is part VSCode, which is a market that's almost impossible to make money in, and part reselling already expensive LLM tokens.

You can look at more parameters and judge how well a company could do in the future. For Amazon, you can predict that once they stop growing, they can make a pretty penny.

But with Cursor that doesn't seem likely. Even if they had the talent for training models from scratch, which I don't think they do, and IF inference makes money, which is not clear at all, training models is still a huge money sink.

So, for them getting bought out by xAi which has a base model they can use makes sense. But what does xAi get here? Another endless money pit?

You're right. I was commenting mostly on "why companies usually talk about revenue than profit"

I think the truth is that it's a new frontier. No one knows if any of this will make money. Investors are just betting that someone else will learn to monetize sometime soon.

they get their own platform like how Anthropic has Claude Code from which they can push out Grok and get training data (from free users or whatever)

whether that actually gets them ahead, that's another question....

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