Facebook is spending a staggering US$19 billion to buy the text messaging app WhatsApp. The company has just over 50 employees, but a user base that dwarfs Facebook, a strong presence in markets where Facebook is weak, and daily message counts that rival the world's cell service providers.
Facebook: All your communication are belong to us
WhatsApp launched five years ago to give people a way to send and receive text messages without dealing with carrier caps and potential fees when chatting internationally. In those five years, WhatsApp has grown to over 450 million active users, 320 million of which use the service daily around the world. In comparison, Facebook has about 145 million users.
Snapping up WhatsApp gives Facebook a presence in markets where it doesn't have a strong presence, and ultimately under its control -- at least on some level. It also means that Facebook has access to one of the largest text messaging segments, which must look pretty enticing to the social networking company.
Facebook says it will let WhatsApp continue to operate just as it did before the buyout. WhatsApp co-founder Jan Koum said,
WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication. There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.
That means Facebook will most likely let WhatsApps continue to operate much like Instagram: autonomously, but with strong ties into Facebook. That doesn't, however, mean WhatsApp user information will stay out of Facebook's hands.
While Facebook is no doubt glad they're getting the users WhatsApps already has, the company is looking to the future and the million new users that join the service each day. That fast growing number has Facebook CEO Mark Zuckerberg excited.
"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," he said.
In other words, Facebook sees WhatsApp as a strong long term investment. Buying WhatsApp gives Facebook a new way to grow in markets where it isn't dominant, and it gets control over the text messaging service that's on par with cell service companies and still growing.
With the pontential for a billion users, WhatsApp looks like an incredibly valuable investment for Facebook. Taking over a service that sends 19 billion messages a day puts Facebook in a strong position to be the worlds largest messaging company. That sounds like an investment that's worth $19 billion to Mr. Zuckerberg.