Facebook Inc (NASDAQ:FB) recently won approval from the European Union for the WhatsApp bid at $19 billion. This is a huge opportunity for the social media giant which wants to transform the telecom industry.
Whatsapp a landmark deal for Facebook Inc (FB)
This is a landmark deal for Facebook Inc (NASDAQ:FB) and it should give the company a strong lead in the mobile messaging market. WhatsApp is already one of the more popular mobile apps and for good reason. It was designed for users to exchange text messages for free. Most cell phone companies charge users for SMS messaging so it’s easy to see the appeal behind this app. This messaging app also allows users to participate in group chats, share photos, share videos, and share locations. The app is available on all major platforms including iOS, Android, BlackBerry, Windows Phone, Symbian, and Nokia S40. The WhatsApp is expected to rival large telecommunications companies like Orange, Telecom Italia, and Deutsche Telekom.
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The app plans to add free voice-call services for 450 million customers by the end of the year. The EU Commission does not believe the deal between Facebook Inc (NASDAQ:FB) and WhatsApp will stifle competition. Joaquin Almunia, European Competition Commissioner explained, “We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market. Consumers will continue to have a wide choice of consumer communications apps.”
Some of WhatsApps rivals such as WeChat, KakaoTalk, and Viber took over telecom customers with a free text messaging option. This can pose a serious threat for rivals. Market research company Ovum reported the sector’s revenues totaled to about $120 billion last year.
Facebook Inc (NASDAQ:FB)’s partnership with WhatsApp will likely be one of the smartest moves the company makes. Facebook already has the lead in social media, if it can take the lead in the mobile messaging sector, it may become even bigger.