Chill! Facebook won’t let WhatsApp lose its mojo

21 Feb,2014

 

By A Correspondent

 

Diehard Whatsapp loyalists needn’t worry about the Facebook impacting the messaging platform. Like it happened post its Instagram buy, WhatsApp’s brand will be maintained.

 

On Wednesday, Facebook announced it had reached a definitive agreement to acquire WhatsApp, the rapidly growing cross-platform mobile messaging company, for a total of approximately $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.

 

WhatsApp, according to a Facebook communiqué, has built a leading and rapidly growing real-time mobile messaging service, with:

  • Over 450 million people using the service each month;
  • 70% of those people active on a given day;
  • Messaging volume approaching the entire global telecom SMS volume; and
  • Continued strong growth, currently adding more than 1 million new registered users per day.

 

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg, Facebook founder and CEO. “I’ve known Jan for a long time and I’m excited to partner with him and his team to make the world more open and connected.”

 

Jan Koum, WhatsApp co-founder and CEO, said, “WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We’re excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world.”

 

According to a communique, Facebook fosters an environment where independent-minded entrepreneurs can build companies, set their own direction and focus on growth while also benefiting from Facebook’s expertise, resources and scale. Whatsapp’s headquarters will remain in Mountain View, CA; Jan Koum will join Facebook’s Board of Directors; and WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications.

 

Neeraj Arora: The man who played key role in WhatsApp’s rise

From the WhatsApp blog:

 

By Anumeha Chaturvedi

 

Neeraj Arora says he is responsible for “all things business at WhatsApp” and considers himself “generally a good guy” on his website. His friends and batchmates agree, at Indian School of Business, where he earned a management degree.

 

From Times Internet to Google to WhatsApp, Arora has had an uncanny ability to identify opportunities, said Mohit Garg, co-founder of training software firm MindTickle and a batchmate at ISB. “He is well-connected and this has helped him move up the ladder. He’s also very unassuming and down-to-earth.”

 

With Facebook buying WhatsApp for $19 billion, Mr Arora, the vice-president for business development, is likely to be a very prosperous man indeed although everyone is tightlipped about just how prosperous.

 

“I feel great” was all that Mr Arora, 35, would tell about the financial implications of the deal for him.

 

“His career really took off with Google, where he was also thinking of either launching a startup or funding one,” said Shameek Chakravarty, director of product management at Yahoo, who was also the president of the entrepreneurship and venture capital club at ISB.

 

When Mr Arora went to Mountain View, his role involved hunting down startups for Google and that meant meeting and connecting with numerous people in the Silicon Valley to understand what was happening in the market, Mr Chakravarty said.

 

“It was not an engineering role and meant forging crucial connections with people in the Valley.” He joined WhatsApp in November 2011 when it had about 10 employees. He was specifically recruited for his corporate development background at Google. Text messages are the most costly form of data transfer and his role meant travelling to different geographies to connect with phone firms to negotiate SMS rates (users get an SMS after downloading WhatsApp; 450 million users means 450 million SMSes) and striking distribution arrangements and partnerships with them.

 

“Over the years, we have connected to discuss how I should manage my startup, which I sold in 2012,” Mr Chakravarty said, adding he had even told Mr Arora that WhatsApp would make a really good exit and that he should fund his friend’s startup with his share of that fortune. In May 2013, Mr Arora said in an interview that WhatsApp is very different Google, Facebook or Yahoo.

 

“Our founders came from Yahoo and they actually saw how the mechanism works with advertising. You have to collect a lot of data to have targeted advertisements. It’s a very strong stance that we have taken and I think we are going to stick with it.” Mr Arora, who studied mechanical engineering at IIT-Delhi, met his future wife Ruchi Bansal at ISB. She is a chartered accountant. “He is a really smart guy and had it all — the looks, the brains,” said Shrutkeerti Khurana, another batchmate.

 

“He always got things done on time, and used to wake us up after finishing assignments. We knew he will go places as he was not a cookie cutter guy, was diligent and knew where he had to reach in life.” Mr Arora said life will not change very much after the blockbuster deal.

 

Source:The Economic Times

Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

Licensed to republish

 

 

Almost five years ago we started WhatsApp with a simple mission: building a cool product used globally by everybody. Nothing else mattered to us.

 

Today we are announcing a partnership with Facebook that will allow us to continue on that simple mission. Doing this will give WhatsApp the flexibility to grow and expand, while giving me, Brian, and the rest of our team more time to focus on building a communications service that’s as fast, affordable and personal as possible.

 

Here’s what will change for you, our users: nothing.

 

WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication. There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.

 

On a personal note, Brian and I couldn’t be more proud to be part of a small team of people who, in just under five years, built a communication service that now supports over 450 million monthly active users worldwide and over 320 million daily active users. They have helped re-define and revolutionize communication for the 21st century, and we couldn’t be more grateful.

 

Our team has always believed that neither cost and distance should ever prevent people from connecting with their friends and loved ones, and won’t rest until everyone, everywhere is empowered with that opportunity. We want to thank all of our users and everybody in our lives for making this next chapter possible, and for joining us as we continue on this very special journey.

 

 

 

Sanjay Menon, Global Capability Lead and India Marketing Services Lead, SapientNitro:

“The WhatsApp acquisition will enable Facebook to achieve a wider youth user base in the mobile segment along with access to real users since it is anchored to a phone number unlike Facebook users. There could be a possibility of intersecting data from both for context based promotion or targeting. We might also see a flurry of acquisitions in the wireless messaging/chat segment in the next few months. Typically, one would have imagined a company like Google to acquire WhatsApp since they have the infrastructure to leverage this additional massive consumer base to bolt on from mobile.”

 

Dippak Khurana, CEO & Co-Founder, Vserv.mobi:

Mobile is disrupting the dominance of PC Web era companies. Online-first companies are struggling to innovate in the mobile space, as many of them look at it as a mere extension to the PC Web, instead of leveraging it’s unique aspects. Many of the big players have realized this and have rapidly acquiring mobile first companies – for eg. Google acquired AdMob in 2009, while Apple bought Quattro Wireless in 2010 and Facebook acquiring Instagram 2012. The current generation of users is making the mobile their primary screen for living a connected life, so it comes as no surprise that companies are focusing their energies and investing top dollars to have the best mobile experience for their audience.

 

Facebook’s overarching charter has hinged on ‘connecting everyone’ in the world. Interestingly, the global youth population, a very relevant demographic is slipping away and exploring other social apps outside of Facebook. Estimates show 62% of global teens claimed to be active on Facebook in Q2 2012, which dropped to 51% in Q2 2013, demonstrating that a vital audience is on the decline as far as Facebook is concerned.

 

On the other hand, Whatsapp is the most successful and fastest growing social communication app. If you compare the growth rate over the first four years, Whatsapp also has the sharpest growth trajectory as compared to other social communication platforms such as Skype, Twitter, Gmail, Facebook etc. Over 450 million people are using Whatsapp every month, and 70% of them are active on any given day. This makes Whatsapp, a strong logical extension to Facebook’s ‘connecting the world’ goal, by helping them develop new mobile experiences which until recently was restricted to the Facebook app.

 

It will be interesting to see if WhatsApp moves away from its subscription model and adopts advertising. After all, in effect, Facebook is going to be able to have access to 450 million verified mobile numbers, many of whom may not even be on the Facebook app. Additionally with Google pushing Hangouts as a default mobile messaging app, Facebook was forced into doing something in the mobile messaging space and this was the best way to capture that market. This presents a distinctive opportunity for Facebook to garner increased user engagement and a greater fillip to their mobile strategy.

 

 

 

 

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