Speculation of Facebook acquiring mobile messaging company WhatsApp was rife a few days ago, following an article published on TechCrunch.
Although the rumour was subsequently debunked by WhatsApp, it caused quite a stir, prompting everyone to ask ‘What if Facebook really does buy WhatsApp?’
WhatsApp is perhaps one of the most versatile and popular apps used by most everyone who owns a smartphone and it is one of the most downloaded apps on both the iOS and Android platforms.
Earlier this year, WhatsApp confirmed it handles 10 billion messages a day – 4 billion inbound messages and 6 billion outbound.
Unlike SMS, it is free to exchange messages and it works on multiple devices – Blackberry, Nokia, iPhone and Android.
And one of the best things about it is that it’s free of pesky ads. But how long can WhatsApp remain so? What will it mean to both marketers and users of WhatsApp if it really gets acquired by Facebook?
According to TJ Tee, partner of local mobile developer Alphapod, the decision to sell would largely depend on what Facebook might be able to do for the WhatsApp platform in terms of growth. “The issue we see WhatsApp facing at some point is scale,” Tee says.
Currently, WhatsApp is a paid app only on the iOS platform. “With Android set on its explosive growth trajectory [apparently WhatsApp already has over 100 million downloads on Android alone], they’re probably going to face serious issues with supporting the bulk of non-paying users,” he added.
For Amarpal Singh, marketing manager of Komli SEA, it would mean that WhatsApp would have the advantage of being associated with an even more established player and this would help to further their reach in markets.
This, Singh reckons, would enable WhatsApp to monetise through advertising. “The depth of data that the bigger social network would have on users will improve targeting incredibly. Whatsapp would not have much in terms of demographics of its users,” Singh says.
However, Alphapod’s Tee thinks differently. “As it is, Facebook has already included Photosync to automatically upload all photos in your camera uploads (photos are stored in a private album) in the background. Why? So they know where you are most of the time,” Tee says, adding that if Facebook has access to WhatsApp user statistics, they would be able to gain a whole lot of insights into ad targeting because it would know who users are communicating with outside of Facebook.
Tee adds that in targeting audiences on WhatsApp, brands could use some form of keyword or contextual targeting (a la Gmail) in reaching out to WhatsApp users. “Location might also come into play, since a lot of WhatsApp users share their location in the app. And there should be no display ads, because that has largely failed on mobile,” he said.
Warren Tan, managing director of Integricity, agrees, saying WhatsApp should be careful of allowing advertising and/or brands into the equation. “I don’t think display ads are the way to go. It would have to be something more innovative, perhaps a model of monetising the data in a way that doesn’t affect privacy.”
But with ads, will existing users be put off? Most think users will not be affected.
“Users may choose to leave but then, when Instagram was bought over by Facebook, it gained more users in a lot of markets as users had more faith in the app with Facebook’s endorsement,” says Singh.
Tee echoes the same sentiment, saying that users will continue to use the app as long as the messaging functionality doesn’t change.
And most agree that privacy will not become an issue. “Most users don’t really care about privacy right now – Facebook is testament to that,” says Tee.
“I think the more important question is how either organisation protects my privacy, and provides me with the best possible platform and dependability,” says Tan.
In all, most who A+M have spoken to have different opinions on whether the acquisition is a good idea.
“Facebook would do better to buy a similar company in Asia for much less and extend reach of Facebook in those markets,” Singh says.
Tee, however, thinks there’s still room for WhatsApp to grow as they’re only limited by the number of smartphone activations.
“As a platform, we think WhatsApp is pretty mature, so it’s a matter of refining the service (features, stability, speed, etc.) But, in terms of the product life cycle, now is a really good time to sell,” Tee added.
“If this rumour was true, I reckon it’s more a defensive play to take out a potential competitor than anything else,” says Tan.
Despite all, the founders of WhatsApp have openly expressed their disinclination towards advertising.
“Advertising isn’t just disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought,” they wrote on their blog.
Only time will tell how long they’ll stay true and resist the temptation of a buyout.
The above expressed views by Amarpal Singh are his personal comments and in no way reflect the views of Komli Media.