Frankly, I don’t know why anyone’s surprised about this whole “Facebook buying WhatsApp” thing. Okay, maybe the $16b price was a little steep. But Facebook sure has some jangle in their pockets, so why not spend a few extra Benjamins to gain even more media coverage focused on the price of the buy?
Facebook is a major social media platform, yes. But they’re losing part of their audience, and the most important part at that. So they have to make another business move. When Facebook bought Instagram in 2012 for $1b, it was groundbreaking. And Facebook absolutely came out on top, with Instagram now having 150 million monthly users. Every second, there are 8,500 likes on photos that have been posted on Instagram. That’s a ton of engagement. And Facebook really likes engagement. So Facebook hung out with Instagram for awhile and they got together and everyone was cool. Instagram has been flourishing and all is well. Then Facebook decided it still didn’t have a total monopoly on the world and everything ever, deciding that it needed another big communication platform.
And WhatsApp was acquired. With good reason.
WhatsApp is gold. Mark Zuckerberg was quoted saying that WhatsApp is on track to acquiring more than one billion users, which makes it a rare (and valuable) mass-market service. It currently has over 350 million monthly active users, and is growing at an alarming rate. And if Facebook is nervous about losing the teenagers to other platforms, then Zuckerberg will definitely want to own one of the messaging services that could threaten to take down the empire. According to The Guardian, cell phone providers were estimated to have lost $23b in SMS revenue even as far back as 2012 because of services like WhatsApp. Now that they’re threatening social media platforms, Zuckerberg wants to fill Facebook’s voids with a competitor. If you can’t beat ’em, buy ’em— right?
It makes sense, if you think about it. Facebook offers a lot of services: photo sharing, public communication, private messaging, and video chatting. But what don’t they have? Phone calls. Since their Facebook Home idea with Android was a total flop, they had to go back to the drawing board to figure out how to integrate the use of Facebook into every facet of someone’s mobile life. And phone capabilities are the one thing they don’t yet have. So when I read this morning on Mashable that WhatsApp is going to be introducing free voice calling later this year, I wasn’t surprised. Nor was I surprised that they announced it after Facebook announced the buy of the service.
When market change and irrelevancy are constantly imminent for a social network, it’s imperative that you stay ahead of the curve. That’s exactly what Facebook is doing here, and I’m certain that they’re already looking into what platform to purchase next. Especially with the so highly sought-after teen demographic, once things are known as “cool” they stop being viewed as such. Facebook needs to be constantly tweaking and developing its existing services, as well as buying new ones to stay a necessary aspect of everyday communication.
A Story of Social Media 