Facebook has once again risen to the top of the news cycle with its recent purchase of the popular messaging app WhatsApp. The Web 2.0 giant paid an astonishing $19 billion for the company. Given the number of users on WhatsApp and Facebook’s ever-growing need to expand its reach – and therefore its advertising capability – the price tag starts to sound more reasonable.
In 2012, Facebook dished out a mere $1 billion for the incredibly popular Instagram photo app. It didn’t take long for Instagram to be integrated into Facebook’s services. However, reports in the media say that WhatsApp’s ferocious growth caught the attention of Facebook CEO Mark Zuckerberg, who commented during a conference, “No one in the history of the world has done anything like that.”
One of the reasons that WhatsApp has become popular so fast is how it handles its text messages. Instead of relying on the sometimes expensive cell phone networks to send SMS messages, WhatsApp uses mobile broadband. This method saves many of its users who are charged for SMS messages to get a free way to send messages. The app truly excels when it comes to international messaging.
Many, including Zuckerberg himself, have discussed the primary reason for the purchase: growth. Recently, there have been reports that Facebook’s youth users have been dropping off rapidly and relying on numerous messaging services to socialize on the network. By pulling WhatsApp into the Facebook ecosystem, Facebook guarantees that it will have a way to connect with any additional growth that WhatsApp is likely to have.
There’s no doubt that WhatsApp will grow year by year. Facebook continues to demonstrate that it is willing to do what it takes to impress Wall Street, guarantee its user-base growth, and make a profit. Since going public, these sorts of deals and changes have continued to increase in number and sometimes in cost.
What will Facebook do next?