Today we hear the news that Facebook have bought What’s App, the smartphone messaging service which, in no small way, may be behind the news that SMS use in the UK has declined for the first time since 1992.
Facebook are very pleased with this purchase, and rightly as they should be, given they saw fit to pay $19bn for the privilege. For their 450m monthly users, they’re forking out $42 for each of them – so must have a bit of a plan for how to make cash out of it over and above the $1/69p annual subscription.
Facebook say they’re keeping the roadmap and business model as is, however many aren’t so sure, claiming the app will be stuffed full of ads within the week.
So Facebook has bought Whatsapp? Don’t be surprised when you start seeing ads for things you’ve been messaging your mates about privately.
— Sam Mathie (@smathie2) February 20, 2014
What’s worth remembering here though is that Facebook are, contrary to much popular belief, not stupid. Whatsapp have been quick to reiterate their policy of no ads on the platform – something that has left many, for many years, wondering how they were ever going to make any real money from the platform. Even with a plan to recoup their money over 10 years – which would be ambitious given the average lifespan of such platforms – $4 a user still doesn’t quite add up unless there’s some wider use… perhaps merging the data with Facebook to bolster that platform’s ad strategy?
With the news of this purchase, though, it looks like the answer to how the founders of whatsapp will make any money has been found… and there are 70 or so new Facebook employees who are probably very happy indeed they held out till now…