Rumor mill: Facebook Buying WhatsApp to Boost Mobile Messaging [Updated]

Rumors are circulating this morning that Facebook is eyeing mobile messaging startup WhatsApp. No money figures are being guessed at, but what people are wondering is what’s so attractive about WhatsApp. And it’s all about mobile. Mobile outside of North America.

We all know Facebook has been lagging in the stock market since their IPO. The dreams of many tech faithful of boosting their portfolios with another high-value tech stock just didn’t happen. Facebook might still be the social media/social network giant, but we know how slowly giants move. What Facebook needs is a little new blood, a new angle, to stay on the forefront of social networking. In Asia, it isn’t the browser-based, on your desktop, social networks that are rocketing in popularity, it’s mobile messaging. Smartphone apps (I think calling them “super apps” might be more correct) that combine messaging with all the features of a social network. WhatsApp doesn’t have that in their app right now, but what they do have is technology that can scale, a brand that people recognize, and expertise that Facebook can use elsewhere in the company. TechCrunch broke the news about this rumor and started right off with the key play in any purchase: mobile apps and technology:

We’re still digging around on potential price and other details about how advanced the deal is. But as mobile becomes the most bloody battleground in the Internet’s game of thrones, you can see how such a deal could make sense. For starters, it would be another way for Facebook to continue extending its touchpoints with mobile consumer. Mark Zuckerberg asserted, on the occasion of reaching 1 billion monthly active users on Facebook, that mobile would be crucial to Facebook reaching the “next billion.” “The big thing is obviously going to be mobile,” Zuckerberg told BusinessWeek. “There are 5 billion people in the world who have phones.”
From: TechCrunch

Ah, but could there be other suitors in the wings, suitors who also want to be leaders in the mobile space (and might be more driven to achieve that goal)? From the TC article, there are connections at WhatsApp to both Yahoo! and Google. Hmm, now either of those companies would love to prevent Facebook from scooping up WhatsApp, just because. Of the two, I think Google might have the best chance of not wrecking the app, Yahoo!, however, needs the app more:

But there is some other great detail to this story that gives it an extra layer of interest: The two co-founders, Koum and Brian Acton, first worked together at Yahoo. It’s where they developed their dislike of advertising-based business models.

Yahoo happens to be in an acquiring mind, and has shown interest in mobile specifically. (Coincidentally, Yahoo is currently also revamping its messaging services.)

Whatsapp’s business development head, Neeraj Arora, came to Whatsapp from Google, where he was a senior member of the corporate development team. According to his LinkedIn profile, he “led acquisitions and strategic investments across products and geographies. Recent transactions at Google include the acquisitions of Zagat, Dailydeal.de, Slide, Picnik, Cleversense, PittPatt and Talkbin.”

PandoDaily has the most in-depth analysis of the Asian mobile messaging/social network app market, and their take is that Facebook is really just grabbing the technology so it can build on it to boost its mobile app and keep people on Facebook and from straying away to pure-mobile social networks:

My bet is not that this would be merely a way to “extend touchpoints with mobile consumers,” but a chance to reinvent the Facebook mobile experience so that it is more in line with the chat apps that are utterly dominating mobile platforms in Asia and stealing consumers and their attention time from larger social networks born in the desktop era.

[…]

When he was describing Kik’s new features to me the other day, the company’s founder Ted Livingston said he believes the mobile chat space is a zero-sum game. For now, Kakao Talk and LINE might rule Korea and Japan, but Livingston believes that one company will come to dominate the entire space – just as Facebook did with social networks in the desktop era.

Facebook has as good a chance at dominating that space as anyone, but it has to move fast. Buying WhatsApp might be a handy way to get there quicker.

From: PandoDaily

By that analysis, WhatsApp, wouldn’t survive long as a stand alone app within Facebook. It would be absorbed into a wholly new app or a wholly new Facebook app that would leave the mobile messaging service space open for another service/app to jump in and succeed.

Right now, these are all rumors and if more breaks in this story, we’ll let you know.

Update: According to ReadWriteWeb, WhatsApp is not in discussions with Facebook:

WhatsApp reached out to ReadWrite to deny the rumor, stating: “The reported story is a rumor and not factually accurate. We have no further information to share at the moment.”  -RWW

As RWW points out, not that Facebook scooping up WhatsApp doesn’t still make sense…sounds like it might not be happening after all.

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  • bellluuuggaaa

    remember what they did with beluga?!?!

    • http://trishussey.com Tris Hussey

      Yeah…that didn’t go so well did it?

  • Jacob

    A reason why people use whatsapp: simplicity. Facebook? Meh

    • http://trishussey.com Tris Hussey

      That is a point made by others as well. Which is interesting given the examples of all the Asian messaging apps which sound like anything BUT simple.

  • Drusenija

    If RIM decide they’re better off becoming a software company and license their BBM technology to Apple, Google and Microsoft, there’s your global messaging platform right there (assuming any would take it).