Facebook, WhatsApp and the price of messaging

In its largest-ever acquisition, Facebook's $19bn deal is about growth, but it could be at the expense of conventional telcos.

Inside the Enterprise: It is a big deal by any standards, and the stuff Hollywood movies or at least, those about internet entrepreneurs are made of.

Facebook has agreed to pay up to $19 billion (11.2 billion) to buy WhatsApp, the smartphone messaging service. The deal is for $4 billion in cash, $12 billion in Facebook shares, and a further, deferred payout to WhatsApp's founders and staff worth $3 billion.

Perhaps CIOs should ask any teenagers in their households for a quick WhatsApp demo.

The sums involved dwarf Facebook's last large acquisition: photo messaging site Instagram cost a mere $1 billion; they are also more than Facebook raised in its own flotation.

So what is Facebook paying for? The idea behind WhatsApp is simple enough. The company makes an app, for all the main mobile phone platforms, which replaces SMS, or text messaging, with a private messaging service.

This runs over the phone's IP connection, so as long as the subscriber has an inclusive data bundle, sending or receiving messages via WhatsApp is free; it is free too via Wi-Fi. WhatsApp makes no charges itself in the first year, then charges a nominal $1 a year fee after that.

Part of the appeal of WhatsApp is that it is truly cross platform: the company has an app for iOS and Android, but also Windows Phone, BlackBerry, and Nokia's S40 and legacy Symbian platforms. This has helped underscore the service's popularity in emerging markets, where "feature" rather than smartphones dominate, and non-Windows Nokias are still very popular.

Featured Resources

Unleashing the power of AI initiatives with the right infrastructure

What key infrastructure requirements are needed to implement AI effectively?

Download now

Achieve today. Plan tomorrow. Making the hybrid multi-cloud journey

A Veritas webinar on implementing a hybrid multi-cloud strategy

Download now

A buyer’s guide for cloud-based phone solutions

Finding the right phone system for your modern business

Download now

The workers' experience report

How technology can spark motivation, enhance productivity and strengthen security

Download now

Most Popular

How to move Windows 10 from your old hard drive to SSD
operating systems

How to move Windows 10 from your old hard drive to SSD

21 Jan 2021
WhatsApp could face €50 million GDPR fine
General Data Protection Regulation (GDPR)

WhatsApp could face €50 million GDPR fine

25 Jan 2021
How to recover deleted emails in Gmail
email delivery

How to recover deleted emails in Gmail

6 Jan 2021