Latest in Acquisition

Image credit:

Why did Facebook spend $19 billion on a messaging app?

Michael Gorman, @Numeson
February 19, 2014
Share
Tweet
Share

Sponsored Links

WhatsApp is a voice and text instant messaging platform with apps for most every smartphone OS. It provides free service for the first year and costs a dollar annually after that. Why then, did Facebook just buy WhatsApp -- aside from the obvious cachet, keeping it away from Google and free advertising that comes with its omnipresence in Katy Perry's Roar video -- for $19 billion (with a 'b'), when it already has Facebook Messenger?

In a word: users. 450 million of them to be precise, and 315 million of those are active on a given day. In fact, WhatsApp's users are so prolific, its messaging volume is roughly equal to that of the entire world's SMS traffic. And, WhatsApp is huge overseas and in emerging markets. According to a report from mobile marketing and research firm Jana, the app is far and away the most used messaging service in India, Brazil, Mexico, Nigeria and South Africa. The Information, which got a more in-depth look at Jana's research, shows that Facebook Messenger usage is far, far lower in those same countries.

Now, is that massive international user base worth $19 billion? It's hard for us to understand how it possibly could be. WhatsApp's founders have pledged to keep the app ad- and gimmick-free, so there aren't any indications that new revenue streams are coming. And, while the acquisition fits in perfectly with Facebook's plan to expand its app offerings, the social network has promised to use the same hands-off approach it did with Instagram -- leveraging its "expertise, resources and scale" to grow the platform, while keeping WhatsApp operationally independent. So, we'll have to wait and see how WhatsApp plans to prove its worth. Maybe some more music video synergy like the kind found after the break?

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
Comment
Comments
Share
Tweet
Share

Popular on Engadget

Windows 10's Start menu is getting a visual refresh

Windows 10's Start menu is getting a visual refresh

View
Vizio's new 4K TVs start at $230

Vizio's new 4K TVs start at $230

View
Best Buy sale knocks 50 percent off a TCL 8-series Roku TV

Best Buy sale knocks 50 percent off a TCL 8-series Roku TV

View
'GTA V' brings transphobia to the next console generation

'GTA V' brings transphobia to the next console generation

View
Samsung is selling a wireless charger that also sterilizes your phone

Samsung is selling a wireless charger that also sterilizes your phone

View

From around the web

Page 1Page 1ear iconeye iconFill 23text filevr