Sunday, March 2, 2014

What's Up with WhatsApp

About two weeks ago Facebook acquired WhatsApp in a block buster deal. The app allows users to communicate with people all over the world for very limited charges ($1 a year). It's also the only widely used app that has more engagement and a higher percentage of people using it daily than Facebook, according to Mark Zuckerberg. This was probably motivation enough for the Facebook creator to acquire the app and add it to his portfolio of potential cash cows. However, WhatsApp currently is mostly used internationally and is much less known here in the United States. It is going to be tricky to try and increase usage in the U.S. where we seem to be more cut off from other countries. The EU creates a need and a natural market for Europe, because people are able to travel and communicate more easily than we are able to in North America. Another problem that might arise is that WhatsApp currently does not have ads and the CEO says that he is happy with the current subscription model and that "monetizing is not going to be a priority for us". We'll see what Zuckerberg has to say about that. The Zuck bought WhatsApp for $4 billion in cash, $12 billion worth in shares for WhatsApp, and $3 billion in restricted stock units for employees and founders. I would assume he would like to see some cash flow come in from that kind of an investment. I know I'm anxious to see what he has in store for his newest acquisition.




Here are the founders of WhatsApp enjoying the fruits of their labor:



  •  Feb 19
    The founders of WhatsApp right now. (cc: )




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