Ever since Snapchat defiantly turned down Facebook’s billions, Facebook staff have likely been sizing up the other messaging competitors. Instead, Facebook set it’s sights on WhatsApp, which it acquired this week for more than $16 billion. While this may make some wish to distance themselves from either service, this purchase could be a boon for both companies.
WhatsApp already has significant market penetration as a messaging app. It has 450 million active monthly active users, about 70 percent of which are active on a daily basis. So far, the SMS replacement app successful in its mission with 19 billion SMS messages sent and 34 billion received per day. Any company would kill for those kind of numbers. But there’s a more specific reason for the purchase than just the numbers.
Facebook’s attempted purchase of Snapchat was rebuffed and it needed another way to get into the messaging app market. Never mind that Facebook already has a messaging app. The company hasn’t released any user data about it, so we don’t know its effectiveness. According to Ars Technica, Facebook’s messenger is not “best” at doing anything, so uptake may be slow, despite Facebook’s massive user base. But WhatsApp is best.
Indeed, WhatsApp has been developing slowly, providing a good service, and growing its user base. Facebook has been careening around trying to morph and change to fit the changing habits of its users, since day one. So what we could be seeing in this purchase, according to The Verge, is diversification that Facebook sorely needs.
WhatsApp will remain autonomous, its business model will remain the same, but now Facebook users have the option of using a superior messaging service. And this is how both companies benefit, by integrating the relatively fractured messaging market. And since everyone you know is under Facebook’s roof, new WhatsApp users are more likely to find their Facebook friends.
“If Facebook can then backfill its influence into WhatsApp, Facebook may be able to give it a significant leg up over the competitors among which it was, formerly, a little lost” Johnston writes. WhatsApp gets a fresh crop of users, Facebook diversifies its portfolio. Reach is expanded for both, and all for the paltry price of $16 billion.
Image credit: Sam Azgor