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WhatsApp: an Incomplete thought

February 22nd, 2014

WhatsAppSilicon Valley’s latest acquisition has the twitter sphere in a tizz. For those living under a rock, Facebook acquired messaging company WhatsApp for $19B dollars

 

What I like about the whole situation is that WhatsApp exploited a perceived gap in market. Sure there are messaging apps that work across multiple platforms, but their focus is all about the social platform. WhatsApp’s was more simplistic, universal messaging across platforms. Given the platform and style of service, users feel far less threatened and take up in various geographies show this.

 

They are also a “cloud service platform” that allows them to mine the information on relationships and interconnectivity that a lot of players in the social service space would kill for. The fact that Google offered USD$10B previously is a clear sign of their value. This can be attributed to a lot of things, least of which is their growth rate and repeat customer rate.

 

Whilst this might highlight some some trends in market, like the purchase of startups focused on social services, it is a blinkered view of the market as a whole. These MEGA players (Google, Twitter, Facebook, etc) have a weird and wonderful product and marketing model that most of the world is still trying to get their heads around. Like most marketing machines, new product are critical to the survival of a company (be it new to market, improvements or repositioning). WhatsApp shows a link between Google and Facebook’s understanding of their customers (BTW that’s not you) and what they want, but most importantly, what it is worth.

 

Apart from the incredulity that is coming out by the average Joe, there are severalitems and articles out there that attempt to show why the $19B.

 

The best article I read was from Danny Crichton (@DannyCrichton)  who points out that the growing trend in social application business acquisition is going to change the nature of business, certainly in Silicon Valley. I’m leaning toward agreeing with most of his observations though I’m wiling to bet that some of the other cities around the world will get a look in as the Valley is rapidly becoming expensive!