Friday, February 21, 2014

Facebook buys WhatsApp, improves stranglehold on global communication

The $19 billion valuation stunned Wall Street. Users feared the possibility of ads. The story of co-founder Brian Acton, who had applied at Facebook in 2009 but was turned down, enthused people.

Facebook's acquisition of mobile messaging app WhatsApp hardly flew under the radar.

The massive deal shows that Mark Zuckerberg believes acquisitions (and of course, standalone apps) are the way to go for Facebook to grow. The company bought Instagram for $1 billion in 2012 and aggressively pursued Snapchat for $3 billion last year.

What this means for Facebook Messenger

Facebook desperately tried to evolve Facebook chatting into a mobile to mobile messaging platform to compete with WhatsApp (much like it developed Poke to obliterate Snapchat, wink wink), but it appears now that the role of Messenger will be relegated back to casual conversation between Facebook friends.

What this means for WhatsApp users

WhatsApp users, all monthly 450 million of them, need not fear: WhatsApp will operate independently within Facebook, much like Instagram, and its strategy for now is growth and increasing its presense worldwide. "There are many clear ways to monetize," said Zuckerberg at the analyst call, "I don't personally think ads are the right way to monetize messaging."

What this means for other social media businesses

Tech companies and social media startups better beware: if you enter Facebook's turf, they are coming after you. If only to keep you out of the hands of rivals like Google. One thing is for sure: Facebook just upped its ante in the communications industry.

So there you have it. Facebook is still the king and will remain so for the foreseeable future.

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