Jason Wincuinas
Feb 20, 2014

Facebook buys WhatsApp: It's neither the medium nor the message, it’s the messaging

Facebook’s $19 billion buy speaks loud and clear about the value of messaging in the worlds of social media, branding and very big business.

We Are Social puts WhatsApp's user base at 450 million, with another million each day
We Are Social puts WhatsApp's user base at 450 million, with another million each day

The race for messaging is on. What started as mainly a techie gimmick to subvert SMS charges has become the next major platform for giants to struggle over. The appeal is not just for simple texts between users; rather it’s an effort to integrate social, e-commerce, mobile and presumably big-data metrics into one giant offering that consumers won’t be able to resist (both in the sense of attractiveness and a more sinister ‘resistance-is-futile’-type perspective).

Rakuten scooped up Viber last week in a near-billion dollar deal. The Japanese company has been lumping together an offering that looks more and more like Amazon in the US, after taking stakes in Pinterest and the Kobo eReader platform. The deal also gives the online retailer closer resemblance to Tencent’s WeChat, which combines instant messaging with shopping, gaming and paying.

Now Facebook’s $19 billion WhatsApp acquisition provides further evidence that this concept is vital for the future. Or at least the future that folks like Hiroshi Mikitani, Mark Zuckerberg and even Amazon’s Jeff Bezos envision.

See also: Opinion - What Facebook's Whatsapp acquisition means for marketers

"Companies need to embrace the mobile mindshift and engage consumers where they are in any moment,” said Forrester Analyst Julie Ask when commenting on the Viber buy. “Today—and increasingly so—consumers expect engagement on their mobile devices, whether they are shopping or seeking customer service. Companies need to be present in those moments.”

Messaging is a big part of that puzzle. For Rakuten, Viber gives the brand at least the appearance of immediate and mobile reachability. Online shopping and customer service fuse in a way that is highly relevant to consumer’s digital lives.

Facebook already developed its own messaging platform and even tried to extend the idea into a hardware version with the so-called Facebook phone (which flopped so hard it might take HTC down with it). But traction hasn’t been stellar. Too few of the network’s billion-plus users adopted it as mainline communication tool. WhatsApp, on the other hand, is close to reaching parity with the entire world’s telecom SMS messaging volume, claims Facebook’s press release. So similar to its Instagram grab, the company has made another buy’em if you can’t beat’em move. Up to today, WhatsApp has been adding close to a million new users every day to its 450 million-strong global base.

“There isn't a revenue stream from it,” said Travis Gallion, Technology Director SapientNitro, “so one can only conclude this is just a play for Facebook to protect and expand their user base.”

There’s little indication in the official Facebook press release about what the future plans are. WhatsApp’s brand will be maintained; its headquarters will remain in Mountain View, CA; Jan Koum will join Facebook’s board; and "WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications", according to the company.

Plus the “partnering” language from both Zuckerber and WhatsApp’s Koum testifies that there won’t be much integration anytime soon.

Gallion speculates that “the proof will be in the integration strategy (and Zuckerberg says they're not going to integrate), which leads me to believe this will be about as effective as eBay buying Skype a few years back. The only real leverage would be to cross-target the audiences on the consumer level. So, from a tech perspective, I've got to believe this is a 'big data' play to add a mobile touch point to the social graph beyond Facebook’s messenger."

But users shouldn’t be too surprised if they start to receive messages from Facebook about how they can connect on one service with the people they already link to on the other. That kind of interplay already exists with Instagram.

Then maybe the brands people have “liked” on Facebook could also have an opportunity to connect and send messages directly to consumers. (Perhaps location-based ones as they shop in their supermarket’s cereal aisle?).

Amazon is already experimenting with its Amazon SNS Service, which allows advertisers and vendors on its site to push messages out to mobile devices. But it’s doubtful that the offering has anywhere near the scale or wide consumer acceptance of WhatsApp. Though paying a huge price, Facebook may have made a wise strategic move, preventing Amazon, Tencent or any other forward-looking suitor from getting WhatsApp first.

The message for marketers then, is to adjust their own strategies to accommodate an even more connected world.

“This is a smart and necessary move for Facebook, whose messaging platform has been struggling ever since it was launched,” said Shann Biglione, head of digital strategy at ZenithOptimedia. “WhatsApp fits perfectly with Facebook's mission. It's almost surprising this didn't happen sooner. However the price tag might prove steep; Whatsapp is facing increasing competition from the likes of WeChat and Line, and the monetization of the ad-free platform will be an interesting challenge to solve for Facebook. But price aside, in the long term, the synergy between these two giants is clearly full of potential. Now they just need to find a way into China.”

 

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