The social media world shook this week as Facebook bought the instant messenger giant WhatsApp for the grand total of $19bn (£11.4bn) in cash and shares. Prior to this Facebook’s largest acquisition was for Instagram at $1bn. At more than ten times the cost of what Facebook paid for Instagram this recent investment is Facebook’s largest acquisition to date.
So what makes WhatsApp such a success?
Not only did WhatsApp allow users to send instant text style messages for free by using the internet as the means for communication, it also transcended the issues surrounding cost of text messages sent on across international borders. WhatsApp allows its user to communicate with their friends, families and colleagues across borders for free.
As the popularity and success of WhatsApp messaging service continually increased, WhatsApp began to develop its functionality. It is clear that WhatsApp recognised its emerging competition from other apps that permitted social interaction. WhatsApp responded to its competitors by developing the App to allow its users to participate in group chats, send photos, videos and audio messages.
Marketed on the basis that WhatsApp allows you to send instant messages using just an internet connection, the app is growing from strength to strength as users are able to avoid the cost of sending text messages. WhatsApp already appears to have a greater international reach than Facebook and it is believed that the founder of Facebook Mark Zuckerberg was keen to secure the deal with WhatsApp after recognising the potential that WhatsApp had the capabilities to acquire 1 billion users.
What will Facebook surprise us with next?