WhatsApp Adding Free Voice Calling, $19 Billion Facebook Acquisition Makes More Sense
Oh, so that’s why. Facebook’s $19 billion acquisition of mobile messaging service WhatsApp was big news, primarily as it left many of us wondering why exactly the company would spend such an unbelievable sum of money on it. After a speech at MWC in which WhatsApp CEO Jan Koum stated that WhatsApp will soon offer free voice calls, it all makes much more sense.
Effectively, when WhatsApp rolls out voice calling capabilities--Android and iPhone this spring and then BlackBerry, Nokia phones, and Windows Phone at some point, too--it, and by proxy Facebook, will be a sort of mobile carrier.
Essentially what’s happening here is that the WhatsApp guys realized that data is the primary expense for mobile carriers and that messaging and voice are cheap. Koum said that they’ve developed a way to facilitate messaging and voice in an extremely efficient (read: cost-effective) manner, which is how the company can afford to offer this service. Note that after a year, users need to pay $0.99 to use WhatsApp--which means that the company’s gross take every year would be close to half a billion dollars and growing.
Moreover, WhatsApp and its new capabilities jibe with Facebook CEO Mark Zuckerberg’s vision for a globally connected future with his Internet.org endeavor. He told Bloomberg that WhatsApp could help double Facebook’s effective user base around the world, and it offers other strategic business opportunities, as well. Making certain aspects of the connected mobile lifestyle simple to use and incredibly inexpensive with WhatsApp is definitely part of that.
The WhatsApp buy, then, is about a slow burn. Zuckerberg, like any good tech CEO, is looking years down the road, and when we catch up to his vision, $19 billion might not seem like all that much money for what he got.
Effectively, when WhatsApp rolls out voice calling capabilities--Android and iPhone this spring and then BlackBerry, Nokia phones, and Windows Phone at some point, too--it, and by proxy Facebook, will be a sort of mobile carrier.
Essentially what’s happening here is that the WhatsApp guys realized that data is the primary expense for mobile carriers and that messaging and voice are cheap. Koum said that they’ve developed a way to facilitate messaging and voice in an extremely efficient (read: cost-effective) manner, which is how the company can afford to offer this service. Note that after a year, users need to pay $0.99 to use WhatsApp--which means that the company’s gross take every year would be close to half a billion dollars and growing.
Moreover, WhatsApp and its new capabilities jibe with Facebook CEO Mark Zuckerberg’s vision for a globally connected future with his Internet.org endeavor. He told Bloomberg that WhatsApp could help double Facebook’s effective user base around the world, and it offers other strategic business opportunities, as well. Making certain aspects of the connected mobile lifestyle simple to use and incredibly inexpensive with WhatsApp is definitely part of that.
The WhatsApp buy, then, is about a slow burn. Zuckerberg, like any good tech CEO, is looking years down the road, and when we catch up to his vision, $19 billion might not seem like all that much money for what he got.
