Facebook Empire: the acquisition of WhatsApp

The latest big – even massive – news is Facebook’s acquisition of WhatsApp for a total of $19 billion. Now that we can put Facebook latest acquisitions in perspective: the $3 billion Zuckerberg offered to Snapchat CEO, the young and arrogant Evan Spiegel, almost sounds offending. 3 versus 19, the equation is clear – Facebook considers the messaging-app 9x more valuable than the video-app.

whatspaa success

“About 11 days ago” Zuckerberg said, “I proposed that if Facebook and WhatsApp joined, that would help connect the rest of the world and could help out with things like Internet.org by bringing these two different communication tools together.” When Zuckerberg mentions his will “to connect the rest of the world” we hear his ambition to dominate communication channels worldwide. WhatsApp would definitively be a perfect companion to realise his digital imperial ambition. The company has over 450 million users with 70% of those active each day; its messaging volume is day by day getting closer to the SMS volume of the entire global telecom industry. Zuckerberg wants his company to have a major role in the messaging-app game with what they describe as “a clear global leader (…) on a path to connect 1 billion people.” The fact that WhatsApp is a world leader in multiple parts of the planet such as Europe, Latin America, India and a lot of places in Asia is another game-changer. With 1.24 billion users mostly in the developed countries, Facebook will soon approach saturation. This is true. How many people do we know without a Facebook account? And those who do not are usually not subscribing to the platform as a form of resistance against a system they disagree with. Today, Facebook’s strategy includes an international growth strongly targeting the developing world. Thanks to its simple and easy-to-use system, WhatsApp has been successful in this market. Indeed, users do not need to create a profile, or network or image; instead they can simply communicate with their friends who are already in their contact lists. WhatsApp is simple, secure and fast. No need to give away personal information such as my name, my gender, my location, my age, my tastes and interests….The only thing I need is my phone number and my contact list and that’s it. Plus, once delivered messages are deleted from the company’s servers – No Big Brother for once. And this is maybe the formula to success. WhatsApp did not spend $1 on Marketing – never. It did not try to gain more users by selling an image or a brand; instead its growth is the direct consequence of an efficient word-of-mouth from happy customers who encouraged their friends and family to download the app and use the service.

Now that WhatsApp is part of Facebook Empire, what will be the consequences? As Jan Koum said in a statement: “Here’s what will change for you, our users: nothing. WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service (…) you can still count on absolutely no ads interrupting your communication.” This last part is at the core of WhatsApp principles. Jan Koum keeps a note on his desk that reads “No Ads! No Games! No Gimmicks” that serves as a daily reminder of their commitment to give a priority to messaging experience and nothing else. Of course, advertising is where Facebook mostly makes money but according to Koum’s statement “There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.” WhatsApp acquisition should not change its core principles and Facebook will respect that the same way it did with Instagram: “Facebook fosters an environment where independent-minded entrepreneurs can build companies, set their own direction and focus on growth while also benefiting from Facebook’s expertise, resources and scale. This approach is working well with Instagram, and WhatsApp will operate in this manner. WhatsApp’s brand will be maintained.” The only change is that Jan Koum will be joining Facebook’s Board of Directors – which is great for someone who applied for a job in Facebook in 2009 – got rejected – became successful with WhatsApp – and is now back at Facebook – on the Board of Director! Not bad at all!

whatsapp slogan

 

 

 

 

–          Facebook official statement

–          WhatsApp official statement

–          Sequoia official statement (first and only investor in WhatsApp before Facebook)

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