I don’t know what’s stranger: the fact I have never heard of the messaging company WhatsApp, or that Facebook paid $19 billion (that’s not a typo) for it this week. Facebook, a company known for large acquisitions of applications for smartphones, broke a personal record this week with this buy. Since it’s IPO, Facebook has been attempting to build an extremely strong portfolio with the best applications accessible for smart phone users that aren’t already core components of the phone. The last noticeable acquisitions by Facebook, in regards to strong, public applications, consist of the apps Snapchat and Instagram, the latter still residing as a top free app in the App Store. Facebook wasn’t the only one vying for WhatsApp in this huge buy-out though, as Google put in a $10 billion offer. After learning of the enormous amounts of money Facebook and Google were pouring into this purchase, I was stlll left with the question of what the app even is and why the companies wanted it so badly. So here’s what I found:
First off, the WhatsApp application is described as a mobile messaging service that functions as a kind of a social network, with users having the ability to send messages to one or many recipients at the same time and also share their locations. Facebook came to find that WhatsApp users were just the right fit within their business market, with an extremely active daily base. In a typical day for WhatsApp, more than 600 million photos are sent and 70% of users are active, which already adds up to more than what Facebook sees. Also, people around the world send 19 billion messages a day on WhatsApp, with 100 million voice messages and 100 million videos. WhatsApp became extremely successful due to its embrace of mobile technology before its competitors (like Facebook) could.
Realizing how successful WhatsApp is, I am still questioning why I have yet to hear about it among my peers. The answer may lie in the fact that WhatsApp’s huge user base is focused internationally, particularly in Europe, India, and Latin America. With Facebook wanting to expand its global market, especially in regards to mobile usage, this purchase seemed almost too perfect. Expected to reach 1 billion users sometime in the next year, the $1 annual subscription fee for WhatsApp will be a huge revenue source for Facebook. With the growth of WhatsApp occurring at such a progressive rate, Facebook definitely bought them out before it could become a noticeable competitor, much like what was done with Snapchat and Instagram. With Facebook’s stretch to try and get a firmer hold in the mobile application market, this purchase seemed just right in terms of money lost from the acquisition and possible future revenue.
After discovering all of this, I am still unsure as the why the typical college student would purchase this app instead of just using mobile messaging applications we already have access to for free. First off, WhatsApp allows you to send texts from Apple iOS, Android, Blackberry, and Nokia devices for free, so for the broke college kid looking to cut down on some costs, this would be perfect. Also, WhatsApp gives you the freedom to send many different types of messages, from text to videos, and more. Did I mention that this also allows free messaging internationally? So you’ll easily be able to keep in touch with everyone whether you are in China, Australia, or in South Bend, Indiana!
Whether Facebook was crazy for spending so much on a mobile messaging app, only the future will tell. I can say, though, that Facebook seems to be headed in a good direction to keep up with the mobile world and keeping a step ahead of their competition, like Google. One thing is for sure: I have already downloaded WhatsApp and I can already see why the world has come to love this little mobile app.