According to TechCrunch, Facebook is in talks to acquire WhatsApp. For those of you who have never heard of WhatsApp, it’s quite a simple application: You install it on your phone, it asks you for your phone number, WhatsApp sends you a conformation code via SMS, you input the conformation code, and now you’re able to message all the people in your address book for free, assuming they also use WhatsApp. It’s basically RIM’s BlackBerry Messanger, but it works everywhere. And by everywhere, we mean everywhere. Nokia bundles WhatsApp on their S40 feature phones, some of which can be purchased brand new for less than $40.
So why would Facebook want WhatsApp? That’s the question that TechCrunch breaks down from multiple angles. The most important point they make is that Facebook makes money by showing you ads, whereas WhatsApp is a paid application. On Android and iOS it’s just a one time $0.99 purchase, which makes it great, but how’s the company going to make money off you again? Is that where Facebook’s ad model comes in handy?
People often make the mistake of assuming that consumers want to put all their contacts from various social networks into one address book. That couldn’t be further from the truth. If Facebook does decide to buy WhatsApp, and if they populate your WhatsApp “buddy list” with your Facebook contacts, then will there be a mass defection?
There are plenty of WhatsApp clones out there; this writer has a soft spot for Viber. What makes WhatsApp special is that they have the most number of users. According to the independent analyst Benedict Evans, WhatsApp could have as many as 300 million users. Put another way, that’s one out of every three Facebook users.
What do you guys think, should this deal go through?