Facebook paid $42 per Whatsapp user to acquire the message servicing app Whatsapp. That is almost double or triple or even more than the average daily salaries of most of the Whatsapp users. (Considering that the average users for Whatsapp is from India and other Asian countries where the monthly salaries are less compared to Europe and US.) The chart below compares how highly users of different social networks / messaging services are valued.
Was that a bargain for Facebook? Only time can tell us whether this deal is a success or not.
On an average, active users sends more than 1000 messages a month. Take a look at the interesting graph below.
This is anyway more than the number of text messages or SMS that an average user sends. Whatsapp was a hit among most of us. The charges for sending an SMS/MMS was traditionally higher. In India we used to spent almost Rs.1 for SMS and up to Rs. 7 for MMS. So compared to these charges, Whatsapp was a rescuer for many of us. The users were more happy to send video/audio messages over Whatsapp rather than normal text messages. So I am sure considering the amount of active users for Whatsapp, that this deal will be a bonus for Facebook. Whatsapp’s vision was to replace text messaging service and provide the service without any ads. This has affected their revenues. But we need to understand that more than revenues, it’s the users that matter. The 450 million users was acquired with word of mouth marketing and without any marketing efforts. Personally I have not seen any one Whatsapp advertisement over internet.
For Facebook, the acquisition is important because their own messenger is under scrutiny. As a user compared to Facebook Messenger I prefer Whatsapp because its simple, user-friendly and more over light weight compared to many other messaging apps. It doesn’t intrude into my privacy except it searches all my contacts and get their phone numbers. Whatsapp currently handles an impressive 50 billion messages per day. The service also sees hundreds of millions of photo uploads every day, putting it far beyond the number of dedicated photo sharing services such as Instagram (55m photos per day).
From the below graph its clear that Whatsapp has grown its user base of 430 million from 200 million in less than a year.
The phenomenal growth of Whatsapp is due to its simple user interface and low-cost. I don’t know anyone who don’t use Whatsapp on their mobile phone. The cross-platform availability also makes Whatsapp better from its competitors.
Facebook paid $19 billion to acquire Whatsapp which is one of the biggest acquisitions in the recent times or in the history of Internet products. Even this fades Google’s acquisition of Motorola recently.
The lessons learned from Whatsapp’s acquisitions are simple. We don’t need a killer product to impress the customers. We don’t need to spend billions in marketing to market a product. Find out the real pain problem for your customer and try to solve it than going behind giving an incredible user experience. User Experience is when the users are satisfied with your product and they recommend it to others without you even spending a dollar on marketing!
Only time can tell us that whether the deal is success or failure. But a startup like Whatsapp being acquired by a giant like Facebook is truly inspiring and I hope this will inspire other startups who are working on solving real world problems.
Let me know your comments, thoughts on this acquisition. Will it be good or bad for Facebook?