Saturday, March 01, 2014

What Facebook saw in WhatsApp and Liked it enough to buy them

Sizing up WhatsApp and Twitter
Sizing up WhatsApp and Twitter (Photo credit: Tsahi Levent-Levi)
A lot of people are scratching their heads about the Facebook deal with WhatsApp. Most of those heads are in the US. They just can't see why Facebook would pay so much money to a company that charges a dollar a year to use it, with the first year for free. In fact, it seems that WhatsApp seems to be looking for ways to give itself away for free. In the early days, all you had to do to get another year for free was to uninstall and reinstall the app. In some countries, using WhatsApp doesn't count against the data cap.
So what is Facebook really buying? It's very simple: Facebook is buying users. The popularity of WhatsApp in the rest of the world is so huge that it dwarfs so-called popular messaging platform. But what makes it most interesting is how loyal users are to it. Rather than bore you with numbers, here are the 5 reasons it is so popular and why Facebook splurged serious cash for it.
It's cross-platform where it matters.
To a lot of people, especially on IOS,  WhatsApp was the way they communicated with their non-iPhone friends. It was also the app Blackberry users told their friends to install if they wanted to send messages to them ala BBM. Using WhatsApp allowed you to join your friends on BB and iPhones.
While messaging platforms in the past were also cross-platform, the platforms they covered were traditionally computer-centric. WhatsApp is all about mobile platforms, from IOS and Android to all the way to the common Symbian phones. Which makes it accessible to more people than PCs. For the younger generation, especially in the rest of the world, a smartphone is their first computer. Which is partly why there are so many active WhatsApp users.
It ties in with your phone number. This is the secret sauce. WhatsApp identifies you by your phone number. At first glance this may not be a big thing. But by making your phone number your unique ID, it ties you, the WhatsApp user, with a verified ID. Your phone company verified you as a paying customer, their definition of a "person". Different phone companies have different regulations for who can have a phone number. Each country has their laws regarding phone number ownership. WhatsApp rides on these laws and regulations to ensure that the phone number being registered to WhatsApp actually belongs to a person. This, plus the fact that users can only message to people in their phone book or to groups that they can leave any time, raises the bar of entry to bots and spammers. 
Plus having a globally unique ID like the phone number is a programmer's dream. They now have a way to follow you from phone to phone and keep you connected to your friends. Switch your handphone, even switch to another platform. all you have to do is insert the sim card, install WhatsApp and you start getting your messages and continue discussions in your WhatsApp groups. For those of us who can't figure out how to transfer contacts, this is really useful because your friends' names appear next to their phone numbers in the discussions. You can then add them back into your contacts in the new phone.
It's the natural progression from BlackBerry Messenger
BBM was king of mobile IM for a long time. Mainly because Blackberry phones were hugely popular and it was acceptable for business use. The speed, convenience and perceived security of the platform made it even more readily acceptable. The physical keyboard for easy typing also helped. But what made it 'secure' was the ID that it generated for each user / phone. It made more likely the person you're messaging with is an actual BlackBerry owner (until recently, BlackBerry's definition of a "person"). When people saw that WhatsApp was using a similar method but using phone numbers instead, they transferred the trust to WhatsApp when they moved off BlackBerry phones and BBM. Most of them were already using both BBM and WhatsApp and carrying conversations across them. So they didn't lose their friends as they moved off BBM or Blackberry altogether.
It improves on text messaging where it matters: price. WhatsApp didn't plan on replacing SMS or texting as more commonly known. But it now transfers more messages than SMS worldwide. Anyone using SMS will find WhatsApp familiar. In most emerging markets, SMS used to be expensive and charged by the message. WhatsApp provided the same functions at almost no additional cost. That became a draw for users and when friends saw their friends using WhatsApp to send messages for free, they wanted in on it, too. The user base growth only fueled more growth.
WhatsApp is mobile social media. Let's compare what you can do on social media with what you can do on WhatsApp. Conduct meaningful or frivolous conversations? Check. Share cat pictures? Check. Post interesting links? Check. Instantly post photos taken with the phone's camera? Check. Post annoying posters with deep thoughts or quotations. Check. WhatsApp can do one better: Tell someone where you are right now so that your friends can find you.. Social media? Not so much.
Facebook is no longer struggling with a mobile app but it probably sees WhatsApp as having figured out the best parts for the next best thing in social media. Don't be surprised to see more WhatsApp-like functions move to the Facebook mobile app. But Facebook should draw the line at cross-posting between Facebook Messenger and WhatsApp. Mobile social media users expect a bit more privacy for a bit more intimacy.
What's next? Instagram has already shown how Facebook could handle WhatsApp. Then there is also a so-called exodus to rival messaging app Telegram. In reality, most users won't care because they are still getting their messages to their friends across. But Facebook must tread carefully. In the mobile space, fortunes can turn on a dime (hello, Draw Something). It's called the mobile space after all.
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1 comment:

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