WhatsApp might be the largest mobile messaging app with over 450 million monthly active users and adding a million new users everyday, it is certainly not the only one. There are others like WeChat, Line, Viber and KakaoTalk, all of which count hundreds of millions of users. Unlike its rivals, WhatsApp is a pure messaging apps with no in-app advertising, stickers, games or mobile commerce for revenue stream. Instead it concentrated upon just one thing and doing it extremely well. And that’s what makes WhatsApp a service for which Facebook is willing to shell out $19 billion and offer its co-founder Jan Koum a seat on Facebook’s board. To put things into perspective, Facebook valuation of WhatsApp is almost equivalent of what Google paid for Motorola ($12.5 billion) and Microsoft for Nokia ($7.2 billion), combined! Also Read - WhatsApp voice transcription feature could launch soon: How it will workAlso Read - WhatsApp announces rollout of end-to-end encrypted backups for Android, iOS
Unlike other apps, which trend for a while and fade away, communication and networking services have the amplification effect. Once a service reaches critical mass, it leaves no space for others to compete even if the competition offers better features. Facebook knows that very well, having done that itself to its rivals like MySpace and Orkut. WhatsApp is that service globally, barring certain markets like China, Japan and Korea. As a user, you would want to use a messaging service where majority of your phonebook contacts are and WhatsApp has become that service. Also Read - Facebook launches Ray-Ban Stories smart glasses alongside new Facebook View app
WhatsApp’s moto can be summed up by a handwritten note written and signed by its other co-founder, Brian Acton, which Koum keeps taped to his desk. “No ads. No games. No gimmicks.” And that is exactly what the company has focused on. This moto has percolated down to the 50-odd employees inside the company.
During my multiple conversations with WhatsApp’s Neeraj Arora, who doesn’t like to throw around his designation and just calls himself the business guy inside the company, it had always been pretty clear what WhatsApp wanted to be – a pure messaging app via which people could communicate with each other. WhatsApp always wanted to be a mobile-only app similar to what SMS was but better. And it has worked. With over 50 billion messages sent and received over the service daily, WhatsApp is extremely close to the total SMS traffic globally!
A lot of the company’s philosophy comes directly from Koum and his childhood. During a recent appearance at the DLD Conference in Munich, Koum spoke about how he immigrated from Russia to the USA with his family and the hardships he had to face. WhatsApp, he claims, does not store any personal information or the messages its users send and receive, which comes from his family’s fears of being snooped upon by the government when they lived in Russia. With advertising not being a source of revenue, WhatsApp did not have to profile its users and read their messages to serve ads that perform better.
With WhatsApp, Koum and Acton’s aim was to be present on every phone on the planet. But with “just” 450 monthly active users, they have a long way to go. According to Sequoia Capital, a major investor in WhatsApp, the company has just 32 engineers, which translates into every developer supporting 14 million users. What the acquisition by Facebook, WhatsApp will have more than a good chance of achieving their aim of being present on every phone in the world.