Why would Facebook buy WhatsApp for $19 billion? Was I the only person to gasp when the announcement was made? Given that there were hundreds of articles surrounding the story, I have a feeling I wasn’t the only one in shock.
Although Facebook CEO Mark Zuckerberg said that the WhatsApp deal was a bargain, others thought differently. CNN, GQ and Gizmodo all made hilarious suggestions for other things Facebook could have bought with that much money, like four World Trade Centers for example and a Bugatti for all 6,337 Facebook employees each.
But all jokes aside, what drove Facebook to spend that much on a chat app? Here’s what I think:
Chat apps are growing massively. WhatsApp alone has +450 million active users worldwide. Japanese Line has over 340 million users (80% outside of Japan). Others like WeChat, Kakao Talk, Viber and Tango all have millions of users of their own, and it only seems like those numbers are getting bigger and bigger.
SMS might be losing the war
Will traditional text messages die out soon? This might be a factor to consider, seeing as in 2013, people sent 7 billion less text messages and 103 billion more instant messages (IM) using a variety of chat apps. Also, some predict that in 2014 alone, telecom providers stand to lose $32.5 billion in revenue due to growing IM use, and that this figure will only get bigger in the years to come.
Emerging Social Media Platform
Sending and receiving free messages is no longer the only thing chat apps let you do. Many apps now let you share all sorts of multimedia interactively, make video and voice calls, find people near you, meet individuals using the same app , play games with your friends and all sorts of other social media-related tasks. Some apps, like Kakao Talk for example, even let you shop through the app. So, moving forward, it is very possible that chat apps might grow into large social media platforms that can challenge the likes of Facebook and Twitter.
The world of digital technology is of course, ever changing. This is a world that moves rapidly and is full of surprises, so making predictions about what its future can hold is no easy task. Trying to do so, however, is still important.
So, if you would like to learn more about chat apps, check out the latest edition of the monthly Top 10s: