Whats’app’ Facebook?

Facebook’s $19 billion deal last week, made it to the headlines of almost every leading daily across the globe. The news took the world by surprise but apparently, negotiations had been on for over two years, between the social media giant and the smartphone messaging major.

But here’s the befuddling question for most, “why is a free messaging app worth $19 billion?” Zuckerberg’s reply was simple. Whatsapp is a rare mass market service with over a billion users, making it “very valuable” and that the acquisition is in line with his vision to make the world more open and connected. When Facebook came out with its Initial Public Offering in May 2012, it had a strong mobile user base but no mobile advertising revenues, due to its failure to monetise those resources. The acquisition of Whatsapp is a step towards repairing that strategy, with Facebook already having a cushion of 1.2 billion users. Another lure for Facebook to shell out $19 billion was to tap into your smartphone address books. The data is immense and whatsapp’s 450 million users proved that in age of technologival advancements, private, one on one communication is not yet passe and here to stay. Facebook itself tried to invent and re-invent its own messaging applications, but was not successful in catching the customers’ eye like few of the other start ups. This stunning acquisition takes care of it quite smartly.

Whatsapp’s monetisation potential is probably what Zuckerberg was after, given its half a billion and growing users. With this single masterstroke, Facebook has managed to grab 18.4 percent of the mobile publicity market. Of the billion Facebook users, 75% access the social media site from their smartphones. With those staggering statistics, $19 billion does seem to be a resonable number, though the results will tell the final story. As things stand today, the colossal amount of the acquisition reaffirms the impact of private messaging. For parting thoughts, where does this leave the ‘good old SMS’?

This entry was posted on Thursday, February 27th, 2014 at 11:55 AM and is filed under Social Media, Tech-Trends. You can follow any responses to this entry through the RSS 2.0 feed.You can leave a response, or trackback from your own site.

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