Facebook is interested in acquiring WhatsApp, a cross platform mobile messaging app that allows users to send SMS for free across all types of mobile phones powered by Google’s Android, Research in Motion Limited’s Blackberry, Apple's iOS, and Microsoft’s Windows Phone 8. The platform is also available on Nokia’s S40 and Symbian operating systems.
TechCrunch cited unnamed sources knowledgeable about the issue, who claim that Facebook Inc (NASDAQ:FB) is in discussion with the management of WhatsApp regarding the acquisition. The media within the technology industry are still trying to obtain further details regarding the transaction, such as the purchase price.
Last October 2011, WhatsApp announced that the company reached 1 billion messages processed in its platform per day. In a blogpost, WhatsApp wrote, “Just how much is 1 billion messages? That is 41,666,667 messages an hour, 694,444 messages a minute, and 11,574 messages a second.1 billion messages a day is a significant milestone and also a small step closer towards our goal: providing a great mobile messaging system for a global market, regardless of your handset.”
WhatsApp has 100 million active users, and the platform is available in 250 countries worldwide. The U.S. version of the app, which costs $0.99 per year, is the second most popular app in Apple App Store. On the other hand, Android users can download the app at the Google Play and use it use it free for one year, and the succeeding year would cost them $0.99. The founders of the company, Brian Acton and Jan Koum, previously worked at Yahoo! Inc. (NASDAQ:YHOO), and they explicitly expressed that they are not interested in running advertisements on the platform.
In his blog, WhatsApp CEO and co-founder Jan Koum wrote, “When we sat down to start our own thing together three years ago, we wanted to make something that wasn’t just another ad clearinghouse. We wanted to spend our time building a service people wanted to use because it worked and saved them money and made their lives better in a small way. We knew that we could charge people directly if we could do all those things. We knew we could do what most people aim to do every day: avoid ads.”
Koum also emphasized, “Advertising isn’t just the disruption of aesthetics, the insults to your intelligence, and the interruption of your train of thought…Remember, when advertising is involved, you, the user are the product.”
The report regarding Facebook Inc (NASDAQ:FB)'s acquisition of WhatsApp is surprising because of the fact that Koum openly criticized startups that are willing to sell their companies immediately. In a previous message on Twitter Koum said, “Totally agree with Vinod Khosla, people starting companies for a quick sale are a disgrace to the valley.”
There is a possibility that the founders of WhatsApp would turn down any acquisition offer from the social networking giant.
A related report from Jon Russel of The Next Web suggested that Facebook Inc (NASDAQ:FB)'s acquisition of WhatsApp is not beneficial for the company despite the fact that it needs to expand its mobile chat app. He opined that WhatsApp competitors, including WeChat, Kakao Talk, and Line, have a significant number of active users. In addition, the companies launched a string of new features, such as voice calls, video chat, and in-service app sharing, which are better than the features offered by WhatsApp. Furthermore, Russel noted that the business model of the mobile messaging company is questionable because it is against advertising. He thinks Facebook would pursue an Instgram-style transaction in acquiring WhatsApp.