Everyone’s talking about the recent sale of WhatsApp to Facebook. For 19 billion dollars. With a B! It’s hard not to talk about a sale price that includes so many 0’s Scrooge McDuck is jealous.
But what’s the point of selling for such a large number? Why does Facebook think that they need to spend the GDP of a small country for a simple messaging application? Because, mobile.
Yes it’s that buzz word: mobile! It seems like everyone is talking about it. Your website must be mobile, your strategy must be mobile, your Facebook page must be mobile optimised etc etc. Essentially Facebook has cemented their place in a world that may one day be sick of Facebook. Two years ago they purchased Instagram for the cool price of 1 billion dollars (though the founders of Instagram might have wished now that they’d held out for a few extra billion). This was their first real foray into purchasing mobile dominance. Instagram was (and remains) one of the largest photo-centric social network in the world with tens of millions of photos being uploaded daily. You can tell that they’re still solely mobile focused because they don’t have a web-upload feature (much to the chagrin of social media managers like myself). So with so many people uploading their photographs through Instagram AND Facebook then they’ve managed to corner the majority of the mobile photo market.
With their sale of WhatsApp to Facebook they’ve also, in one fell swoop, cornered the mobile messaging market.
In fact the only company that has more DAU (Daily Active Users) than Facebook is WhatsApp. That’s fascinating in and of itself. Facebook was never attempting to buy out the competition but was rather attempting to kill off SMS once and for all. It’s done this through focusing on their next billion users (we blogged about this before) and by presenting itself as a fully functioning competitor to phone carriers, and their atrocious SMS charges, they’re making every one of those next billion users lust after Facebook as a platform. In fact Mark Zuckerberg mentioned this at the Mobile World Congress recently. He said that he wants Facebook to be the ‘dial tone‘ for the Internet. This sale of WhatsApp has made that possible.
So what now? Where are we all headed? Well Facebook will continue to focus on the mobile market. Of the 1.23 billion users that use Facebook 945 million of them are accessing it from a mobile device. The next generation of Internet users will most likely be accessing the Internet from ONLY a mobile device. Why? Because they’re coming from areas of the world where the technical infrastructure for desktop computing was never put in place. India, Asia and Africa all missed out on the desktop computing revolution. However they’re shooting past the Western World in terms of the mobile revolution. Why? Because they don’t have to worry about anything like ‘legacy computing systems’. All they have to do is construct a series of cellular towers throughout the country and suddenly you have blazing fast 4G Internet available on your smartphone or tablet. It’s these things that are bringing the formerly 3rd world up to the 1st world faster than we can realise. That’s what Facebook is aiming for: to be the first site that these people use when they switch on their phones.
That’s why WhatsApp was worth every single cent of the 19 billion dollar sale price.
*Sorry. We just had to!