What’s The Deal With WhatsApp

Apr 03, 2014
Abraham Villegas


As many of you know, Facebook has recently been acquiring apps in order to dominate the social media market. The interesting thing is that most of us don’t stop to think just how much money they are spending, and where the value comes from. Take Instagram for example which was acquired for 1 billion dollars, that is more zeros than the average person can visualize. Surprisingly, Facebook made an even bigger jump when they offered to buy Snapchat for 3 billion dollars. Doesn’t that make Instagram regret taking the billion dollar deal? Snapchat determined that they would be alright on their own.

The Future of Social Media

As marketers, we can all see value in both Instagram and Snapchat. We also understand why and possibly how Facebook would be able to utilize them. Although they currently keep the Instagram platform free of advertisements – Which is how Facebook makes most of its revenue. It may be possible that they have other plans for Instagram.

Enough about Snapchat and Instagram though, these are small players. Even Facebook’s most recent acquisition, Oculus Rift, was bought out at $2 billion. The near future of social media doesn’t look like it will be using virtual reality just yet, but they can certain utilize the benefits and power of WhatsApp. The difficult concept to grasp is just how does one find an app so valuable that they are willing to pay 19 BILLION dollars?

WhatsApp’s Market Value

Well according to Facebook’s CEO, Zuckerberg is rather impressed in WhatsApp due to its exponential success in just 4 short years. As a matter of fact, WhatsApp blew Skype, Twitter, Gmail, AND Facebook out of the water in terms of growth in those 4 years. Skype reached 52 million, Twitter 54 million, Gmail 123 million, and Facebook with 145 million. Guess what the growth of WhatsApp was?

Guess….Done Guessing?

419 million users. So why wouldn’t Facebook want to get in on the action here? It probably would have made sense to purchase WhatsApp in its earlier stages, but no one could have guessed the immense growth which actually happened in the last 2 years. For what it is worth, WhatsApp is special because it provides a new opportunity to embrace instant connectivity to customers. If 19 billion seems like a steep number, imagine what it could be worth when WhatsApp reaches their 1 billion user goal.

There has never been a service that has been able to accumulate exponential growth in the way WhatsApp has. Why have they accumulated such great numbers? Because they provide a similar communication service to smart-phone users for only a fraction of the cost. The best way they’ve attracted all of their users is by making the first year free for all users, and every year after only $1. That’s right, it’s a hard deal to pass up on.

What Can We Learn From This

As a business, we all aspire to grow our market at exponential rates. Realistically, that is not possible by simple probability. WhatsApp is experiencing what some refer to as a Big Bang Disruptor. All that means is that their growth on the bell curve pretty much looks like a shark fin. For every other business, the bell curve seems more realistic.

What we can take away from this is that Facebook is staying true to their goal in connecting people and building relationships. That is what social media marketing is about. On a smaller scale, the road to true success is not to simply build customers, but create long term relationships with them. What’s the best way to establish a relationship with a customer? Add unexpected value. Customers, and people in general love when you surprise them with a little extra, especially when they aren’t expecting it. If you build the connection, it can only bring a positive result from the customer. That might be a referral, or an opportunity to do something greater, maybe just a loyal relationship. The point is to remember why we truly use social media. Some of it is to sell the product, and the rest is to connect with our audiences.

What are your thoughts? Will Facebook’s acquisition of WhatsApp provide greater opportunities for marketers? Or do you believe they have different plans?

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