WhatsApp co-founder and CEO Jan Koum insisted that the Facebook deal to acquire WhatsApp would not have happened if Facebook were to interfere in WhatsApp’s operations. With Facebook’s resources, WhatsApp may not have to worry too much about having to generate revenue but as Koum said in his blog post, everything remains as it is, including the $0.99 a year subscription service. This acquisition gives Facebook protection against potential competition that it may have had to face if WhatsApp falls to another company’s hands.
It would be interesting to find out what Facebook’s intentions are with WhatsApp considering that it has Messenger. Most likely though, Facebook just wants to bring in anyone who may pose a significant threat to its own business and longevity. WhatsApp’s adoption rate and active users are its greatest asset. It’s growing faster than Facebook, Gmail, and Twitter within the same time period and given its rate of one million new users per day, it’s on track to reach a billion users in early 2015, provided the adoption rate does not deteriorate.
Unlike its competitors, WhatsApp has always resisted the push to become a platform. It did not integrate games into the app, it has no premium accounts, no advertising whatsoever, not even stickers, and its only revenue seems to be from the $0.99 annual subscription fee, although whether the company has financial deals with mobile network companies around the world is unknown. The company has had various partnership deals with Nokia over the past four years but representatives from both companies never confirmed any suggestions of financial considerations.
What WhatsApp has right now are 450 million people who use the service every month through mobile devices, over 300 million of whom use it every day. Unlike many other messaging services, WhatsApp remains exclusively mobile. When apps like Apple’s iMessage, Google Hangouts, KakaoTalk, Line, and even Viber made the jump to the desktop, WhatsApp remain unapologetically mobile. Since 2009 the company has insisted on remaining mobile.
Facebook’s ambition to be the top mobile company in the world may face resistance and challenges should WhatsApp not be part of the company. Apparently Google may have also been interested in cutting a deal with WhatsApp according to The Information. Had Google managed to table an acceptable offer to WhatsApp, it would have had direct access to that pool of mobile subscribers as well as the talent at the company and Facebook would be facing a steep hill to climb. On the other hand, given what drives Koum and co-founder Brian Acton and the massive difference in how WhatsApp and Google view consumers, it’s unlikely that they would make a deal with Google.
According to Mark Zuckerberg, WhatsApp and Facebook Messenger serve different audiences and purposes, therefore the company will continue investing in both to keep everyone happy. “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”.
Should this deal close, and there’s probably no reason why it shouldn’t, WhatsApp co-founder Brian Acton may just well be one really happy chappy. He applied to work at Facebook in 2009 but was rejected. 4.5 years later, Facebook is buying his company for $19 billion.
Facebook turned me down. It was a great opportunity to connect with some fantastic people. Looking forward to life's next adventure.
— Brian Acton (@brianacton) August 3, 2009