Chances are pretty good that you have a smartphone – hell, you’re probably reading this article on a mobile device right now – so you should be familiar with WhatsApp, the multi-platform instant messaging service currently serving more than 450 million users worldwide. Well, guess what? It’s a Facebook product, or at least it will be once the dust settles in the social network giant’s latest massive buyout.
Facebook has made a bid of USD19 billion (that’s RM63 billion if you need your heart rate ramped up) for WhatsApp, potentially gaining access to the service’s huge user database and gaining an even stronger foothold in instant messaging, bolstering Facebook Messenger’s already impressive penetration into the market.
WhatsApp is one of the world’s most popular mobile instant messaging services, founded by two former Yahoo! employees and operating almost exclusively out of Russia, to keep operating costs low. So low, in fact, that since its initial release, WhatsApp has been doing very well indeed on absolutely no ads and a mere USD0.99 annual subscription fee for its users. Whether or not this business model will continue after the Facebook acquisition remains to be seen.
Facebook, like most other internet giants, has a history of flashy purchases to shore up its online dominance, especially in the mobile market, but the WhatsApp buyout is definitely a few steps up from its last high-profile purchase: all in, the WhatsApp acquisition is a whopping19 times the value of Facebook’s purchase of megapopular photosharing service Instagram in 2012.
Like Instagram, all indications point to WhatsApp bein allowed to retain its own branding post-sale, and for it to run semi-autonomously from the main Facebook machine.
All this runs parallel with Japanese e-commerce juggernaut Rakuten’s purchase of another instant messaging service, Viber, and the rise of other such services such as Line and WeChat, which is currently enjoying a lot of traction in Asia.
