Whatsapp – Facebook’s monopoly grows

Written by on 20th February 2014
Category: Business travel and relocation

Facebook announced this morning that they’ve acquired the global instant messaging service Whatsapp, for the incredible fee of $19bn. On face value the return on investment, in terms of immediate profit, isn’t financially astute dollar for dollar or share-for-share. The main reason behind this acquisition, by the web giant, points towards market share and potential growth. Uniquely, Whatsapp provides access to 450m users a month worldwide and 320m active users daily; with one million new registered users per day.

Whatsapp is one of the phone networks biggest competitors, offering users unlimited text and picture messaging services for a one off payment of just 69p; something the world’s major phone networks simply cannot compete with. So after successfully saving the masses heaps of money on their phone bills, what can Whatsapp do for Facebook? Mark Zuckerberg used his usual marketing patter and said: “Whatsapp is on a path to connect 1bn people and I’m excited to make the world more open and connected.” What Facebook chooses to do with its new acquisition, we don’t yet know. One guess is that you’ll have to have a Facebook account to use it. Is this another step to social communication world domination?

Facebook also acquired Instagram in September 2012, and in November 2013 they made an unsuccessful bid of $3bn to picture-messaging service Snapchat, who fought off Facebook’s attempt to monopolise picture messaging. As the future of the web shifts to the palms of our hands, Facebook’s move connects it with more smartphone users than ever before. Mark Zuckerberg said: “Whatsapp is the only app we’ve ever seen with higher engagement than Facebook itself.” Just when you think Facebook loses a bit of popularity they buy more market share and jump right back in to the public’s eye… or hands, so to speak. What’s next? The purchase of Flappy Birds and Candy Crush?

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Image: janpersiel (Creative Commons Licence)