On 19th Feb 2014, Facebook acquired Whatsapp, mobile messaging service for whopping $16 Billion in cash and addition $3 Billions for employees to retain with Facebook. By all measures this becomes incredible team for both Facebook and WhatsApp. Here are what Facebook will get by acquiring $19 billion startup and what made WhatsApp such a huge asset for Facebook, Google, etc.
What Facebook gets:
- Facebook is all about connecting people and with WhatsApp it will stay as numero-uno company for social networking
- WhatsApp has all it’s user base on mobile and mobile is next internet of 2000′s
- WhatsApp has 0.5 billion monthly users within span of 5 years and expanding it exponentially every day. It means larger user base
- Facebook messenger is only bit popular in USA and Canada but having seldom reach in Europe and emerging markets like India
- This gives Facebook opportunity to expand and strengthen it’s user base around the world
- Once it becomes winner take all scenario, Facebook can monetize as like it did with itself
WhatsApp strategy for success:
- Simple, easy to use for anyone
- Clean interface with no glitch
- No ads, whatsoever
- Smooth and user friendly apps
- All helped to build user base and they boosted the growth on increased user base
- Uses lite bandwidth for any data plan so became popular in countries like India with limited data plans
- Growth is prime compared to revenue
- Revenue comes from yearly nominal charge of $1 for some countries
- Another revenue source is tie up with telecom companies for inbuilt app like Facebook
- Ultimately cool product is key and focus on customer than revenue. Revenue comes up automatically with customers.
Leap Forward 