Facebook's $19bn Whatsapp buyout: what it means for you

Facebook's bn Whatsapp buyout: what it means for youYou've no doubt heard the news by now: Facebook has agreed a $19bn deal to buy out hugely popular messaging surface Whatsapp.

But what does the deal – comprising $16bn in cash in $3bn in Facebook stocks – mean for the everyday user of both services? The answer, for now at least, is not much.

Whatsapp has grown rapidly over the past few years to become the most popular chat application on the mobile web with around 450m users. Its popularity is largely down to the fact that it's avoided tacking on the kind of add-ons and gimmicks that have made Facebook unacceptably bloated for many users.

It's all about the chat, in other words, and users are charged a nominal $1 a year subscription fee, a small price to pay for a chat service that's totally eclipsed good old text messaging for a large part of that 450m user base.

However, with Facebook set to take over the reins, should we be concerned that Whatsapp's days of chat without the bloat are numbered?

Surprisingly, it seems not – or at least not in the short term. Facebook says it will leave its latest trinket to do its own thing, and is more interested in growing user numbers than making a quick buck.

While Facebook is obviously massively popular around the globe, Facebook Messenger is less so, and some of the markets where it's been the least successful – Europe, Latin America and India – are exactly where Whatsapp is the strongest.

By bringing Whatsapp under its umbrella to join the likes of Instagram, Facebook is taking another step forward towards realising the kind of self-contained ecosystem that has turned Google into such a massive force in the digital world.

It's not there yet, obviously, but that's clearly what it's looking to build. And even if Whatsapp remains ad-free and cheap or free to use, Facebook can still make plenty of money from incorporating user data into its database, thereby giving advertisers a clearer target for their marketing efforts on Facebook itself.

So while a $19bn price tag seems huge considering the relatively modest income Whatsapp generates, this is about empire-building, about matching the likes of Google, Amazon, Apple and Microsoft in a high-stakes technology land-grab where it's about what you own, not how much you paid for it.

Add a comment

JanSt / MOD  Feb. 20, 2014 at 10:07

Whatsapp buyout: what it means for you

Another reason to not use Whatsapp...?

Soon the only thing left for Facebook is to buy Facebook... Oh, wait - that's what shares are for.

Having said that: anything that annoys the networks is good news

CTPAHHIK  Feb. 20, 2014 at 11:51

Martin, small typo:

"Facebook can still make plenty of money from incorporating user data into NSA database"

JanSt / MOD  Feb. 20, 2014 at 12:03



You don't need an account to comment. Just enter your email address. We'll keep it private.