WhatsApp And Facebook: Is the Messaging App the Future for Mark Zuckerberg?
With Facebook, you can text and chat with friends and family, meet new people, share photos, and sometimes call, for free, all in real time worldwide. With WhatsApp, you can share photos, text, and perhaps talk, for a low fee of 99 cents a year, also in real time and worldwide. So Facebook's $19 billion dollar purchase of WhatsApp sounds like a match made in digital heaven for the young companies.
Facebook CEO Mark Zuckerberg and CEO and Co-Founder of WhatsApp Jan Koum are going to be offering something real and tangible to its consumers who perhaps use the same services. As of March 2013, Facebook has raked in 1.11 billion users; while WhatsApp says it has 450 million monthly users worldwide, and over 320 million active daily users. With Facebook and WhatsApp combined that is an approximation of 2 billion users since the acquisition.
The Sanfranciso Gate reported that WhatsApp is bigger than text messaging. WhatsApp is a free app that can be downloaded to any smartphone. The company calls itself "a personal real time messaging network which allows millions of people around the world to stay connected with their friends and family." Since the merger, WhatsApp customers were probably a little worried. Koum sent a note via their service.
Koum wrote: "Here's what will change for you, our users: nothing."
One person that is not worried about the acquisition is Chief Executive of U.K.'s mobile operating giant EE, Olaf Swantee. In the Wall Street Journal, Swantee states that the growth of mobile messaging is driven by data hungry consumers. EE, Swantee says, is driven by "post paid" contracts where customers use and download an app to communicate. "The acquistion of 'WhatsApp' by Facebook shows the value of mobile communication services to consumers," Swantee said.
It might not seem like a big thing to an EE executive, but it impacts what both Facebook and WhatsApp can do together. Maybe they can create a phone, launch their own satellite into orbit, and perhaps create a service similar to Skype. These two young companies together could accomplish great things.
Facebook just celebrated it's 10 years in existence, and "WhatsApp" started five years ago. According to Forbes, WhatsApp has grown significantly since its inception; in the calendar year of 2013, the company sent out 18 billion messages, and it received twice that with 36 billion messages. Surprisingly, WhatsApp's main rivals are Facebook, Apple, and to some extent Twitter.
WhatsApp's Koum and Co-Founder Brian Acton both are former Yahoo engineers who started the company. Koum's and Acton's company only has 50 employees, most of them are engineers. The purchase of the company comes with great anticpation, hopes for success, and high risks.
Koum and Zuckerberg both are aware of this fact. If the deal does not go through, an agreement has been made that Facebook will give WhatsApp $1 Billion in cash, and $1 billion in stocks to recoup their losses.
But, if the deal is successful, Koum is expected to join Facebook as an executive, and become a member of Facebook's board of directors.
This is pretty great for Koum who was living on welfare when he first came to America, at the age of 16, from the Ukraine.