In a little over a decade, Silicon Valley has witnessed two nearly $20 billion deals.

In 2002, Hewlett-Packard paid $19 billion for rival PC maker Compaq, in a bid by the storied Silicon Valley company to resuscitate its fortunes. And of course there is now Facebook's bid this week to buy WhatsApp, a hot mobile messaging service based in Mountain View.

Both deals helped define their eras -- but that's about where the similarities end. And their differences illustrate just how much the valley has changed in such a short period of time.

For HP, the Compaq deal was about grabbing market share. It was about cutting costs and finding those ever-elusive "synergies" that corporate types like to talk about. It was a defining deal for the era because it was an effort by the valley's largest company to try to do something bold for boldness's sake and thereby ensure its survival in the post dot-com bust world. Whether it helped or not is debatable; HP became the No. 1 global seller of personal computers, but the PC is no longer the dominant device in the tech industry.


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Now what matters are Internet speed, high risk and fast growth, all spurred by users shifting to the uncharted mobile market. Deals aren't about the economics, they're about users and momentum. Worried that its growth is slowing, Facebook saw WhatsApp as a rocket it needed to ride even though the destination -- how it will integrate with Facebook and make money -- remains unknown. And we're in the midst of a boom, not a bust. The WhatsApp deal defines this era because it's the most ambitious attempt so far by a dominant valley company to fend off a future in which it's no longer dominant, an issue that worries all the giants of tech these days.

"It's equally quixotic," said Michael S. Malone, who wrote "Bill and Dave: How Hewlett and Packard Built the World's Greatest Company."

The valley is still getting its bearings with the price tag for WhatsApp. The deal, potentially worth up to $19 billion, has inflamed talk of a bubble, although that does not seem to concern Wall Street, which is quite bullish on the big tech companies.

But this is a strange new valley, in which apps are born and grow in what seems like obscurity, only to emerge announcing they already dominate the planet. A common reaction for all but a few after the news Thursday seemed to be "WhatsApp? What's that?" Try one of the fastest-growing mobile messaging services ever, with 450 million users and on track to have a billion by the end of this year. "It's the only app we've ever seen with higher engagement than Facebook itself," said CEO Mark Zuckerberg.

Sure, HP of the early 2000s and Facebook today are vastly different companies.

Founded in 1939, HP is a global tech giant with an extensive array of products and services. For a period of time after the Compaq deal it was the largest tech company on the planet, measured by revenue. But it suffered then, and does now, with the impression that its glory days are behind it.

Facebook is just 10, but it dominates our social Web lives. It does one thing really well, operating a social network that includes a significant fraction of humanity, and under Zuckerberg's laser direction it has executed on a straightforward business model focused on advertising.

And the deals are different. Although the HP-Compaq merger led to a big shareholder battle over whether the two companies' business lines and cultures were a good fit, one could argue that the deal made some business sense. Compaq, founded in 1982, had a strong balance sheet, extensive sales channels and thousands of paying customers. Like HP, it had problems but it felt like a business.

Forget that playbook.

Rather than months, Zuckerberg made the deal in less than two weeks, perhaps pushed by rumors of Google's interest. And there won't be a shareholder revolt; Zuckerberg holds all the cards.

Unlike the HP-Compaq deal, Facebook isn't talking about WhatsApp's balance sheet (does it have one?) or how to weave the companies together or cut costs. It wants WhatsApp as a front-row seat to watch and shape the future.

In the "old valley," companies talked about the future but really looked to the past. Combine big companies, offer a complete menu of products and services to customers, and cut costs.

In the "new valley," companies jump at new services that may not have revenue but are wildly popular. "It's a land grab for users," said John Furrier, an entrepreneur who founded Silicon Angle.

"The HP-Compaq deal was about desperately trying to not fall into the past; Facebook-WhatsApp is all about fleeing into the future," said Paul Saffo, a Silicon Valley forecaster. "The old strategy was to purchase synergy; the new strategy is to buy velocity."

Business school metrics and strategies dominated discussions around the HP-Compaq merger. But that was a fading industry move, a consolidation deal between two old fighters who leaned into each other to soldier on.

Zuckerberg doesn't want to be in that position. With WhatsApp, he is bolting a piece of the future on to his company. Who knows where it will take him?

Contact Michelle Quinn at 510-394-4196 and mquinn@mercurynews.com. Follow her at Twitter.com/michellequinn.