In February 2014 Facebook bought the messaging app WhatsApp for $19 billion (£11.4bn), which is 19x times more than what the company paid for the photo based social media platform Instagram. So it begs the question, is it really worth that much money?
For $19 billion Facebook could have bought clean water for the entire planet ($10bn), funded the entire U.S government budget for one day ($10.5bn) or the whole of the country of Jamaica for $15bn and still have a few billion leftover.
Mark Zuckerberg on “Why Did Facebook Buy WhatsApp?”:
“Our mission is to make the world more open and connected. We do this by building services that help people share any type of content with any group of people they want. WhatsApp will help us do this by continuing to develop a service that people around the world love to use every day.”
Mark Zuckerberg announced in August 2013 that he was setting up a new project called internet.org. The goal of this project is to get two thirds of the world who are not yet connected to the internet connected so everyone has the same opportunities. He also said that he will be working with large organisations to tackle challenges such as making internet access available to those who cannot currently afford it.
WhatsApp currently have 450 million active users and are still getting around 1 million new users every day. Mark Zuckerberg’s goal is to get WhatsApp to reach 1 billion people which is just under 1/7 of the world’s population as his biggest vision is to eventually connect the whole world together.
Although Facebook launched their instant messaging service Facebook Messenger in 2011 it was too little too late as WhatsApp, which was released in 2009, already and still has monopoly of the online texting market and has an astonishing amount of daily engagement and shared content (roughly 53 billion messages a day—including 600 million photos, 200 million voice messages, and a 100 million videos). There’s nothing on the market which has as much engagement as WhatsApp, which is exactly why Mark Zuckerberg paid a whopping $19 billion.
WhatsApp is a much cheaper way for people to send messages as it’s all done over the internet, so as long as you’ve got a little bit of internet data or wifi on your smart phone you’re always going to be able to send messages for free. It also has cool features other text messaging platforms may not have such as the chance to see when your recipient was last active, when they’ve read your message and unlimited group messaging chats.
WhatsApp allows you to send/receive pictures, videos and voice clips and in the near future they’re planning on adding in a brand new feature which allows people to make phone calls over the app. This development will really start to put other mobile phone providers under pressure to make their calling charges cheaper in order to keep hold of their current market share.
Mark Zuckerberg has said that there are currently no plans to change WhatsApp and that they are committed to not make changes to the user experience by introducing Facebook ads.
The founders of WhatsApp have said in their blog:
“WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication. There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.”
I guess we will have to wait and see what the impact of this record breaking purchase will be. At the rate that social media and communication is evolving, this maybe sooner than you think.
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