It’s always a case of doing one better than anyone else when it comes to being at the top of the roost these days. Facebook is a prime example. It has gone from 2012 and buying Instagram for $1 billion to paying out $19 billion just a few days ago and buying WhatsApp. So, it’s a neat little app, but is it worth that much really?
Instagram in 2012
Of course, Facebook was prepared to pay out the billion dollars after having done its math since Instagram was a serious mobile competitor and was eating into its market. Instagram hadn’t taken Facebook users away, but it certainly provided the danger that one day people would want to divorce Facebook and close their pages. After all what does Instagram do any more than Facebook?
People want to see photos; they want to see short comments about people’s lives and ‘like’ that in a click of a button. But, when it boils down to it, Instagram, just like Snapchat, is offering that fast-paced app that means I can scroll through reams of photos of my friends every day and bin the boring stuff I don’t need. A picture tells a thousand words, doesn’t it?
Mark Zuckerberg said when the announcement was made about taking over Instagram: “For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.”
The company was estimated to have a market value of just $500 million before the buy-out took place. The purchase was definitely all part of a picture that nobody quite knew at the time.
WhatsApp in 2014
But, now with the purchase of WhatsApp, it is becoming clearer and more in focus. Competitors have become part of the Facebook team and they have created an App that already works wonders. Facebook can learn from that past experience without the teething trouble and rake in cash with the web-based apps by selling to more customers out there in the market.
- WhatsApp had 400 million active users at the end of December 2013.
- They talk in ‘active-user’ figures rather than registered users (like other companies).
- They added 100 million new users within the period September to December 2013 alone.
- On February 20th the number of active users reached over 450 million.
- They never had to spend money on marketing or advertising as the messaging service went viral around the globe.
- While Facebook has 1.23 billion users worldwide, people send 150 million (per day) more photos back and forth through the mobile app WhatsApp.
- The total number of photos sent between users has reached 500 million on average per day.
Apparently, there will be no change to the way WhatsApp works over the next two years, but afterwards the strategy will become clearer, probably involving some sort of ad strategy that will be linked to Facebook.
Theories as to why Facebook acquired WhatsApp abound today. None of them are actually hitting the nail on the head and perhaps they are all combinations of what really is going through the mind of Facebook.
- Photos: Facebook could very well want access to the photos that are being exchanged via WhatsApp and the enormous numbers that have been trafficked through that mobile app every day.
- Fashion: Times change and people move on as fast as they click on a new app to download it. You have to constantly stay on top of the market if you want to stay at the top.
- Information: Some might argue that Messenger on Facebook is far from popular and perhaps Facebook would like to get its hands on what we are actually talking about and use that material for other means (advertising, amongst other things).
- Branching out: Facebook is entering he world of conglomerate super companies and certainly needs to diversify with the acquisition of mobile apps to keep its market share.
Mark Zuckerberg wanted WhatsApp to “make the world more open and connected”. That’s quite possibly what will happen, but along the way he will make a hell of a lot of money through this purchase.
All of the silly sums that have been mentioned in the past few weeks and months concerning mobile apps just go to show how much business there really is in the sector. Mobile apps are the future of our smart-connected world and even Facebook admits that had they been starting out today they would be nothing more than a mobile app. They didn’t have the mobile market sewn up. But, now they do (for the moment). From small ideas for application come ideas that turn into billions.
Becoming a serious competitor for companies like Facebook means that you can have more than just the competitive edge over them; it means that they will want you.