Menu
With WhatsApp, Facebook aims for immediacy

With WhatsApp, Facebook aims for immediacy

Facebook sees opportunity in real-time conversations carried out using WhatsApp

Popular messaging app WhatsApp is joining Facebook’s team.

Popular messaging app WhatsApp is joining Facebook’s team.

When's the last time you replied, promptly, to a message sent through Facebook? Aren't sure? Well Facebook, craving more real-time usage of its service, hopes to change that.

On Wednesday the company said it was acquiring WhatsApp, a leading mobile messaging service used by people as an alternative to telecommunications carriers like AT&T and Verizon. Facebook said it was paying US$16 billion for the five-year-old buzzy upstart.

Facebook already provides some products for communicating online, but many people don't use them for quick back and forth conversations, CEO Mark Zuckerberg said Wednesday during a conference call with analysts following the company's announcement of the deal.

Those products include a chatting client within Facebook's site on the desktop, as well as a standalone app, called Messenger, for mobile messaging. But those products, Zuckerberg said, are used mostly between people who are already Facebook friends, and not always in real time.

"Someone will send someone a message, and almost like a more informal e-mail, accept a reply later in the day," Zuckerberg said, specifically of the company's Messenger app. But WhatsApp, he said, evolved from replacing SMS.

"Those are two pretty big and different use cases, and the world needs both," Zuckerberg said.

Or at least Facebook, evidently, needs both.

WhatsApp lets people send messages on their mobile device in much the same way they would a text message, but without the standard SMS rates that might apply. Conversations on the app can be carried quickly, either between two people or amongst a small group.

Facebook wants those conversations to be carried out in its ecosystem. "WhatsApp complements our services, and will add a lot of new value to our community," Zuckerberg said. A big chunk of that value, he said, will come from the real-time, in the moment communications carried out by people using WhatsApp.

It's something Facebook wants more of, as part of its quest to win ever more users across the world and provide them with a wider array of services to connect with each other. Under the Facebook umbrella, WhatsApp could fit in nicely with the social media company's plans to offer a wider array a standalone apps around different types of communication and networking.

By acquiring WhatsApp, Facebook could also gain a massive influx of new users, although it's unclear how much overlap there is between the two companies' users. WhatsApp has roughly 450 million people who use its service each month, Facebook said, while Facebook has more than 1.2 billion monthly active users.

But WhatsApp is on a path to having 1 billion users, Zuckerberg said. "Services having 1 billion people are incredibly valuable," he said.

Facebook's monetization plans though are harder to gauge. During the conference call, both Zuckerberg and WhatsApp CEO Jan Koum said their focus now would be on growing users, and that ads would not be the best way to make money within a messaging service. WhatsApp does offer a paid subscription model.

Facebook Chief Financial Officer David Ebersman said the company did not see any regulatory issues under the deal, and that it was expected to close later in 2014.

Meanwhile, although mobile operators still make money on text and on traditional voice calls, those services play a shrinking role in their overall business as alternatives sprout up, analysts said.

"The horse has already left the stable on this one," said Phil Marshall of Tolaga Research. Some carriers, including the big U.S. operators seem to be acknowledging this by structuring most plans with unlimited voice and text.

The tide has probably already turned against telecommunications carriers, the original providers of real-time communications. While Skype and other voice apps ate into minutes, Internet-based "over the top" services such as WhatsApp also overtook carriers in text-message volume in 2012, research company Informa Telecoms & Media reported last year. That year, the OTT players carried an average of 19.1 billion messages per day compared with 17.6 billion daily on SMS.

(Stephen Lawson in San Francisco contributed to this report)

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags Internet-based applications and servicesconsumer electronicsWhatsAppMobile OSessocial networkingmobilesocial mediainternetFacebookmobile applications

Featured

Slideshows

Educating from the epicentre - Why distributors are the pulse checkers of the channel

Educating from the epicentre - Why distributors are the pulse checkers of the channel

​As the channel changes and industry voices deepen, the need for clarity and insight heightens. Market misconceptions talk of an “under pressure” distribution space, with competitors in that fateful “race for relevance” across New Zealand. Amidst the cliched assumptions however, distribution is once again showing its strength, as a force to be listened to, rather than questioned. Traditionally, the role was born out of a need for vendors and resellers to find one another, acting as a bridge between the testing lab and the marketplace. Yet despite new technologies and business approaches shaking the channel to its very core, distributors remain tied to the epicentre - providing the voice of reason amidst a seismic industry shift. In looking across both sides of the vendor and partner fences, the middle concept of the three-tier chain remains centrally placed to understand the metrics of two differing worlds, as the continual pulse checkers of the local channel. This exclusive Reseller News Roundtable, in association with Dicker Data and rhipe, examined the pivotal role of distribution in understanding the health of the channel, educating from the epicentre as the market transforms at a rapid rate.

Educating from the epicentre - Why distributors are the pulse checkers of the channel
Kiwi channel reunites as After Hours kicks off 2017

Kiwi channel reunites as After Hours kicks off 2017

After Hours made a welcome return to the channel social calendar last night, with a bumper crowd of distributors, vendors and resellers descending on The Jefferson in Auckland to kickstart 2017. Photos by Maria Stefina.

Kiwi channel reunites as After Hours kicks off 2017
Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Show Comments