How does a relatively unprofitable company of about 50 employees whose product is a blatant copy of another’s get acquired for 19 billion dollars in five years? The answer might not be entirely clear, but Facebook shareholders hope that CEO Mark Zuckerberg has a good idea after Facebook’s acquisition of mobile messaging app “WhatsApp” for $19 Billion. WhatsApp users also would like to know what this all means for the service they have deeply integrated into their lives.
WhatsApp had its start by offering a BlackBerry Messenger like experience for mobile devices other than BlackBerrys. What that means is that this kind of messaging service offers a much richer experience and allows for enhanced speed and security by utilizing internet data services as opposed to a traditional SMS text message. Today, WhatsApp has a user base of about 450 million monthly active users, with billions of messages being sent every day, and is growing at 1 million users a day. The company charges its users a dollar a year to use the service, making a profit nowhere near the $19 Billion purchase price by Facebook. Looking at Facebook’s current ad based revenue it enjoys through its other services it is not farfetched to suspect a change in the monetization strategy of WhatsApp. Despite these concerns WhatsApp CEO assures the Wall Street Journal that he believes WhatsApp “will stay completely independent and autonomous.”
These kinds of changes may concern the millions who use and trust WhatsApp especially with all of this happening on the heels of a report by Canadian and Dutch agencies having concerns over the privacy of users of WhatsApp due to violations of international privacy law. The report found that although WhatsApp had made some changes, the report still concluded that “The investigation revealed that WhatsApp was violating certain internationally accepted privacy principles, mainly in relation to the retention, safeguard, and disclosure of personal data.” Facebook has been no stranger to privacy concerns and controversy and users of WhatsApp will have to take all of this information into account when choosing what mobile messaging app they will like to use.
For now it is uncertain what changes, if any, will come to WhatsApp after this acquisition by Facebook. With more secure services like BlackBerry Messenger recently going cross-platform consumers will have to consider which companies they want to possibly have access to their conversations and personal information.
In the comments I would love to hear how you message friends (sms, imessage, bbm, whatsapp, kik, facebook messenger, etc) and why you use that service. Should we be concerned about the violation of privacy laws by some of these companies? What steps should be taken to protect consumers who utilize these services?