Facebook Buying Messaging App WhatsApp for $16 Billion

[batistuta]

Not that expensive

I also think it's a very high price, but comparing to the latest major acquisition of the largest phone company here in Denmark, it may not been too bad; they paid 300$/customer to buy an upcoming mobile company, which was eroding their margins by aggressive pricing, thereby gaining customers fast.
I know an app is a different thing, but I'm pretty sure Facebook has done the math, and they know some people will abandon WhatsApp now.
They need to act to keep their user base high, also if that means expensive buying. And they mostly pay with their own shares, probably with a non-sell clause for some time.

 

[attila]

OMG, I just dropped my yoghurt on the floor.

I bet the Instagram folks are now mad at themselves for underselling Instagram.

Well, WhatsApp is actually making real money, while Instagram didn't - a higher price makes sense.

A price higher than a few million doesn't...

 

[dragje]

I understand why Facebook has bought this app, it's another huge platform with users so this opens opportunities for Facebook to integrate this with Facebook and selling adds to even a wider or rather bigger audience.

I stopped using Facebook beginning this year. I noticed that most of my friends didn't had anything interesting to say and that includes myself. Not that my friends are dumb or actually don't have anything to say but I noticed that having conversations in real life has so much more value and content when typing simplistic conversations about everything and nothing combined on Facebook, or Google+

The problem with these platforms, for me (!), including Twitter, is that 90% of it's users actually think they understand what they are writing about while in reality almost all of them don't have any clue where they are talking about. This is because people have an opinion about literally everything despite a lack of background knowledge about the subject and most of these people have the urge feeling that they should "share" this.. How often do you see the phrase on Facebook: "I lack knowledge to make a valuable statement here about this subject"? It's a rhetorical question.

I choose to skip Facebook and Google+, these platforms doesn't add anything valuable to my life, especially Twitter. I'm simply not interested in what common people think about 'everything' and not in a bit interested what their opinion is about this celebrity or that event. I rather hear opinions from people on specific subjects from people who actually have been studying the subject itself for years. But those people are not on Facebook or Google plus and most of the time not on Twitter as well. It's more ment for common people. And despite I consider myself to be common, these platforms simply doesn't appeal to me a bit.

 

[batistuta]

To all the US people saying they never use it:

Yes I know you don't. But where I live, and in many other countries, it's the standard. First thing you install on your phone is Whatsapp. Nobody uses text, Whatsapp is the standard.

I'm probably just out of the loop, but I have never been asked if I had it. And I am living in Scandinavia. If I need group chatting (rarely) with people without IOS devices (also rarely) I use email, which also does pictures etc. and which everyone has. Im sure WhatsApp is more elegant, but in my circles it's far from a standard and I dont think that will change with Facebook buying them, on the contrary.
Data plans are cheap and unlimited messages are the norm, so the use case is marginal.

 

[aussy2000]

Will big companies like Facebook ever stop buying smaller companies to minimise competition?

 

[batistuta]

Will big companies like Facebook ever stop buying smaller companies to minimise competition?

Of course not!

Whatsapp has about 50 employees, so FB is first and foremost buying the users

 

[vmachiel]

I'm probably just out of the loop, but I have never been asked if I had it. And I am living in Scandinavia. If I need group chatting (rarely) with people without IOS devices (also rarely) I use email, which also does pictures etc. and which everyone has. Im sure WhatsApp is more elegant, but in my circles it's far from a standard and I dont think that will change with Facebook buying them, on the contrary.
Data plans are cheap and unlimited messages are the norm, so the use case is marginal.

I think it varies extremely between countries. I'm Dutch and literally everyone I know that lives in the Netherlands has Whatsapp installed and about 80% actively use it to communicate.

 

[badams002]

What do you use? For international and cross platform messaging? Please don't say iMessage, because not everybody on this world as an iDevice. Don't get me wrong, I love iMessage, but only if Apple would open it up for cross platform, which I don't think they will.

On the other note, its funny because I just found out about this app called Telegram yesterday. Looks promising and they have desktop version as well. If the deal goes through it might be time to switch. I don't need Facebook to sniff through my messages...

Open up iMessage...hmmm. Maybe Apple should do that to keep FB at bay. Open it up and offer it as a free download on Android. 16 billion dollars...wow.

 

[StyxMaker]

In my opinion I prefer iMessage, especially as it's integrated with normal messages. However iMessage isn't cross platform, and as far as I'm aware it doesn't allow group chats.

Family members and I have been group chatting on iMessage since it was first released.

 

[Robert.Walter]

"I’m excited to announce that we’ve agreed to acquire WhatsApp and that their entire team will be joining us at Facebook.

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.

WhatsApp is a simple, fast and reliable mobile messaging service that is used by over 450 million people on every major mobile platform. More than 1 million people sign up for WhatsApp every day and it is on its way to connecting one billion people. More and more people rely on WhatsApp to communicate with all of their contacts every day.

WhatsApp will continue to operate independently within Facebook. The product roadmap will remain unchanged and the team is going to stay in Mountain View. Over the next few years, we're going to work hard to help WhatsApp grow and connect the whole world. We also expect that WhatsApp will add to our efforts forInternet.org, our partnership to make basic internet services affordable for everyone.

WhatsApp will complement our existing chat and messaging services to provide new tools for our community. Facebook Messenger is widely used for chatting with your Facebook friends, and WhatsApp for communicating with all of your contacts and small groups of people. Since WhatsApp and Messenger serve such different and important uses, we will continue investing in both and making them each great products for everyone.

WhatsApp had every option in the world, so I’m thrilled that they chose to work with us. I’m looking forward to what Facebook and WhatsApp can do together, and to developing great new mobile services that give people even more options for connecting.

I've also known Jan for a long time, and I know that we both share the vision of making the world more open and connected. I'm particularly happy that Jan has agreed to join the Facebook board and partner with me to shape Facebook's future as well as WhatsApp's.

Jan and the WhatsApp team have done some amazing work to connect almost half a billion people. I can’t wait for them to join Facebook and help us connect the rest of the world."

Today Mark talks-up Jan this and Jan that. I won't be surprised if some tomorrow, Jan won't even be able to get a callback from Mark.

I think Facebook bought What's App because this is where its future users seem to be defecting to; so it was a move to, if not increase FB growth rate, at least to slow it down. (And behind this, FB aslant access to all your contacts and chat information.)

Since the future seems to be flat chat, much more than expansive social sharing like Facebook, Apple could blow FB and WA out of the water by opening up IMessage and FaceTime up to run cross-platform. This would go far toward making the WA acquisition a big waste of money.

If iOS users could reach non iOS users via FT and iM, or better yet find a way to hook into those apps through the FT and iM apps, fewer people would see a need to use those apps directly. (I see the first as being do-able and the second not so much.)

 

[bushido]

You're paying too much for just 100mbit/s.

JUST??? thats almost the fastes you can get unless you live in south korea or japan + i think americans pay 4 times that for half the speed. anyway OT

 

[sshambles]

Good riddance Whatsapp.

You were good for talking to non-iPhone people for free.
Viber will do for now... until it's bought out.

 

[seveej]

Waitaminute!

Facebook buys WhatsApp for 16 billion?
I mean 16 000 000 000 $ ?
I mean more than double FB's yearly revenue.
It's also more than 5 times FB's yearly profit

This is not the first time I hear of WhatsApp, but it is not yet a household name.
FB pays 16 Billion for a startup?

WhatsApp has one distinct advantage: A clear revenue stream: 99c/year (per subscriber).

The problem might be that if 400 million users produce 7 trillion messages per year, that 99c might not cover the energy bill.

 

[Laird Knox]

In other news....I still don't understand why people use WhatsApp

My sister lives out of the country. AT&T is prohibitively expensive for international dialing. The country where my sister lives blocks other IMs like Skype.

WhatsApp does have a use case.

Then aging your question is like asking why use Facebook when you already have email.

----------

Waitaminute!

Facebook buys WhatsApp for 16 billion?
I mean 16 000 000 000 $ ?
I mean more than double FB's yearly revenue.
It's also more than 5 times FB's yearly profit

This is not the first time I hear of WhatsApp, but it is not yet a household name.
FB pays 16 Billion for a startup?

WhatsApp has one distinct advantage: A clear revenue stream: 99c/year (per subscriber).

The problem might be that if 400 million users produce 7 trillion messages per year, that 99c might not cover the energy bill.

LOL

I don't understand the exorbitant price but a startup? Do you haver a clue how many users 400 million is?

 

[macUser2007]

Sooner or later in Europe (except UK) everybody is going to use Threema. End to End encryption with servers in Switzerland. It's a one time purchase and already no1 in the german Appstore.

Wow! Does this come with tinfoil, too?

Most people don't care about "end-to-end" encryption on their chat apps. If peopled valued their privacy so much, neither Facebook, nor Twitter, nor Google would be successful.

Plus, the reality is that while in Europe privacy laws are strong when applied to private corporations, governments generally have a much easier time snooping on people.

 

[n-evo]

I think it varies extremely between countries. I'm Dutch and literally everyone I know that lives in the Netherlands has Whatsapp installed and about 80% actively use it to communicate.

Hi,

I'm from Amsterdam and I completely got rid of WhatsApp in 2012 because the group chats and non-stop stream of pointless messages associated with them were driving me insane.

Nice to meet you!

 

[SMIDG3T]

In other news....I still don't understand why people use WhatsApp

Yep, for me it's because EVERYONE I know has an device that supports iMessage!

 

[Oberhorst]

Apple messed up so royally by not buying WhatsApp years ago. Same goes for Google.

iMessage and Hangouts are vastly inferior.

Well played, Facebook.

Would be time for Apple and Google to get their differences sorted and make iMessage and Hangouts compatible to each other. In other words make it possible to send iMessages to Hangout and vice versa. And offer a desktop client for that system on Windows (and Linux for all I care).

 

[gto55]

Viber will do for now... until it's bought out.

Viber was bought by the japanese group Rakuten.

Another news about instant messaging apps:

Kakao Close to Signing Morgan Stanley, Samsung Securities as Advisers for IPO - WSJ.com - http://online.wsj.com/news/articles/SB10001424052702303775504579392543096924128

Apple should look after Hemlis Messager:

Hemlis means "Secret" in Swedish

We love the internet, social networks and the power it gives for sharing and social connections. When sharing something on Twitter or Instagram the whole world can see it and that is great!

What we don't love though is that private communication has more or less turned into an open stream for companies and governments to listen into.

Companies like Facebook, Twitter, Apple and Google have been forced to open up their systems and hand out information about their users. At the same time they have been forbidden to tell anyone about it!

We're building a message app where no one can listen in, not even us. We would rather close down the service before letting anyone in.

Secrets are only secrets if they are secret.

https://heml.is/

 

[lamerica80]

Soon, google and facebook will own everything. Soon my children, soon..

 

[Mr-Kerrse]

Not used it in a long time as i get unlimited free texts, unlimited free calls..

I don't understand why they would buy it, how do you even make money from a free app with no advertising.

 

[koruki]

Only profit numbers do. All the other numbers, not so much.
By no measure WhatsOever.
And way after Unix "talk". Instant messaging predates the Internet.
Because Facebook runs on friendship? It was always WhatsApps goal to be sold to some big advertising company. There are no free services without any twists.
All smartphones, which means not even half of all the phones in the world today. On the other hand iMessage integrates with SMS and MMS and those services work with all feature phones all over the world.
It's becoming clear to me, you know the wrong people.
What? Why wouldn't it work with all sim cards? That's ridiculous.

lol thanks for the dissecting my reply, it does make it easier to read. I'm just curious it sounds like you have never used whatsapp based on your last question. Let me know when you've used it.

 

[marcelvelky]

I think numbers speak for themselves. Whatsapp was the first popular multi-platform chat app. This was before iMessage, before facebook message app etc. It's a tidy app, does what it needs nothing more nothing less and no silly ads or distractions. It works on all phones all over the world and overall just a well executed app. It's become part of the iPhone for me any many people I know. The first concern we all have when travelling is to make sure whatsapp is working during sim card swaps.

This is just first, what i was thinking..now i consider swap to viber..completely

 

[olowott]

okay, thats just too serious , come on - Damn!!

 

[Nuvi]

WhatsApp used to be all about anti-advertising, a true user driven product with user base willing to pay for the service.

The following is WhatsApp's mission statement which is just polar opposite of what they just did:

http://blog.whatsapp.com/index.php/2012/06/why-we-dont-sell-ads/

The fact remains, FB paid $16 billion which means that in order to profit from their investment it would take them anywhere from 40 to 80 years with WhatsApp's current business model. Therefore, it is more then likely that sooner then later WhatsApp will be turned into "just another ad clearing house" in order to achieve higher ROI. In the future users will not be users but products that FB/WhatsApp will be selling to advertisers.

In all honesty, who needs $16 billion? Answer: the greedy venture capitalists who already have billions.