Facebook gets the message
Ten years old this month, Facebook has spent two billion pounds in cash and nine billion pounds in Facebook shares on acquiring the WhatsApp application along with its userbase of 450 million subscribers. Does WhatsApp really open up that much increased advertising potential to Facebook, or are there other reasons behind the purchase?
WhatsApp is a five-year old app for smart phones. It is described as a messaging application, although the hurriedly-written BBC Newsflash about the Facebook acquisition unfortunately described it as a massaging application. It allows users to send text messages and photos to other WhatsApp users as well as acting like a general phone dialler. Of course you can do all that on your phone anyway, but WhatsApp makes it a bit easier to have a back and forth text conversation, is a bit more graphical, and because it is using the broadband web access of the smart phone, it avoids network operator charges. It also offers more advanced features such as file sharing and group chats.
It is claimed that WhatsApp is now handling as many messages each day as the whole of the world's mobile telecomms companies combined. Despite being based in Silicon Valley, it has only a small user base in the USA, but is a market leader in Europe and Asia. Its subscriber base is growing by a million a day, but does that justify the price Facebook were willing to pay, and can Facebook turn it into an advertising vehicle without breaking the usability of the interface?
Perhaps the real value in WhatsApp lies in the information it gets from its users. When you install WhatsApp you need to give it permission to access your phone's address book so that it can identify which of your contacts are WhatsApp users and give you appropriate contact options each time you use it.
Facebook is already in the business of profiling its users by working out who knows who. If it now has an app in which it can legally read and cross reference your phone usage, know who you call and when, even for contacts who are not themselves Facebook or Whatsapp users, then potentially it can significantly increase its knowledge of you. If someone knows you phoned a garage they can guess you are a car owner. If you call a school its more likely you are a parent. If you call certain clinics, someone might decide you are sexually active. This is all pure speculation on my part, but its possible that apps like WhatsApp opens up that whole can of privacy worms.
It had been reported that Google were also courting WhatsApp and saw it as a replacement for its own product, Hangouts, which comes pre-installed on all Android phones but is used very little. However, WhapsApp turned down Google and a week later went for an even more lucrative proposal from Facebook. Apple already has its own similar application called iMessage but that only allows users to communicate with other iPhone or iPad users. Microsoft's messaging strategy revolves around Skype. There are also other independents to rival WhatsApp. Viber and WeChat are popular mobile messaging products in Asia whilst western users provide a significant fan-base for BBM (formerly Blackberry Messenger) and KIKS, which currently claims 100 million users. These independents are probably all eyeing the Facebook deal and looking for equally lucrative offers from the big players to come their way.
26th February 2014
This article comes from the SKILLZONE email newsletter, published monthly since January 2008, and covering topics related to technology and the internet. All articles and artwork in the SKILLZONE newsletter are orignal content.