Reaction Highlights: WhatsApp Gets 19 billion ‘Likes’ From Facebook

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Reaction Highlights: WhatsApp Gets 19 billion ‘Likes’ From Facebook

25 February, 2014 by Bela Hamid

Days after it was announced that the mobile messaging app Viber was acquired by Japanese internet giant Rakuten for $900million, the news was dwarfed by the noise following the announcement that Whatsapp had been bought by Facebook for a record $19bn. This post contains some of my favourite reactions to the news from Twitter & 9gag.com, a selection of opinion and analysis from industry experts and a list of items that Facebook could have spent the money on instead.

Does EVERYONE think that Facebook overpaid for Whatsapp? Asia has already seen the potential that other regions of the world are only beginning to see in mobile messaging apps, according to this Wall Street Journal blog article. Some of Whatsapp’s biggest competitors in Asia are Line in Japan, KakaoTalk in Korea, and WeChat in China. These messaging apps have developed into platforms that allow users to access a range of services.

For example, China’s WeChat offers e-commerce services to its users, and Japan’s Line offers mobile games, which they say are a big source of revenue. Messaging apps have been considered a hot mobile service in Asia for some time and Line’s Chief Strategy and Marketing Officer says:

“The amount that Facebook is offering to buy WhatsApp is not excessively high. This is a proof of how valuable smartphone messaging has become in the age of mobile.”

Over at Reuters, finance blogger Felix Salmon (@felixsalmon) suggests that to ask whether Facebook paid too much is to ask the wrong question. With this acquisition Zuckerberg is making a statement that mobile is more important than money. Facebook’s mobile offering is not as popular as its desktop product. After going public, everyone knew that leading on the mobile front would be the next biggest challenge and Zuckerberg would need to make the transition as quickly and aggressively as possible. That’s what he’s been doing. You can read more of what Felix Salmon has to say in his article here.

Scott Bales (@scottebales), author of Mobile Ready, believes Facebook is building a 21st century media company and is collecting assets and networks that is putting it on a path to redefining what today’s media company looks like. In this blogpost he says the acquisition will do little to expand both brands (most Whatsapp users are already on FB), but Facebook will gain:

“massive amount of business intelligence on how international users think, what features they need and use, what their bandwidth requirements are, what devices and platforms they use, and even exactly who and where they are”.

This article on PandoDaily looks at why Whatsapp was considered to be worth nearly 10% of Facebook. When Snapchat was offered 3bn, it was only worth about 2.5% of Facebook. The author doesn’t think Facebook paid so much for Whatsapp because it was specifically chasing the global audience, the teen audience, the mobile audience….Apparently, Facebook needed Whatsapp at any price for the same reason that it bought Instagram: because Whatsapp was a threat to its dominance in terms of photos.

“Facebook has become the world’s most dominant, and resilient, social network by ensuring that it “owns” photos. Today’s purchase shows they’re determined to maintain that dominance whatever the cost.”

Whatsapp processes 500 million images per day; that’s more than Snapchat, Facebook and Instagram each do. Read more here.

Benedict Evans (@BenedictEvans), mobile analyst and partner at VC firm Andreessen Horowitz, says that this deal illustrates most of the key trends in consumer tech today. Firstly, Facebook is determined to be ‘the next Facebook’. Evans draws our attention to the way today’s leading web companies deal with disruption compared to their predecessors. Secondly, the winner-takes-all dynamics on desktop do not appear to apply on mobile. Thirdly mobile is the next computing platform and is several times larger than desktop. He explains more here.

Whilst industry experts are trying to make sense of this deal, others are taking a more lighthearted approach and fantasising about different brands Facebook could have bought instead of Whatsapp:

American Airlines for just over $ 11.5bn
Marks & Spencers for just under $15.5bn
Ferrari for just over $6bn

and other items you could purchase for less than $19bn such as:

The Hubble Space Telescope ($10bn)
The world’s tallest building ($1.5bn)
Jamaica ($14.84bn)

It’s been several days since the announcement, and what does everyone think about it now that the shock has died down a bit? They’re still trying to get their heads around it. Well, whilst they do, I shall continue to enjoy twitter and 9gag.com’s reactions…

Aral Balkan ‏@aral Feb 20