WhatsApp shows the way

by psmedia on February 23, 2014 in News

WhatsApp shows the way  

This week the world woke up to news of the mega merger of social network behemoth Facebook (FB) with one of the fastest-growing cross-platform instant messaging apps WhatsApp. While the move reinforces FB founder Mark Zuckerberg’s vision of being the global connector, it also drives home the amazing potential of small businesses grabbing the lion’s share with the right imagination and innovation.

Founded by Jan Koum, 38, and Brian Acton, 42, WhatsApp’s dream run without latching on to advertising for funds is inspiring. A little more than four years old, the company, which already has 450 million besotted users, is projected to become a global household name in the years to come. This potential was not lost on Zuckerberg, whose FB leads the social network scene with 1.2 billion users and growing. When quizzed about the mind-boggling acquisition worth $19 billion for a startup, Zuckerberg is reported to have said, “Services with a billion people using them are all incredibly valuable.”

Read : Small Beginnings guarantee Big Returns

What went right

It’s a product that is globally perceived as ‘cool’ because of its immense ease of use in exchanging messages, pictures, audios and videos instantly by a cross-section of society. Its only requirement is a smartphone with internet. It has an easy user interface and allows one to form groups in a jiffy. Unlike many social platforms that seek personal information, it is private and works with just mobile phone numbers. Moreover, the software is free for a year and comes with a nominal annual fee thereafter.

Koum, who is part of FB’s board of directors as part of the deal, told the media, “WhatsApp’s extremely high-user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide.” He is also said to have given away the following stats: WhatsApp processes eight billion inbound and 12 billion outbound messages daily — twice the traffic of FB — and more than Twitter’s estimated 200 million users a month.

He also assured people that nothing would change with the merger and that WhatsApp would continue to run as independently as ever.

Chasing success

The massive deal appears to be on every pair of lips. There is amazement at the size of the offer considering that WhatsApp’s revenue comes only from the nominal annual fee that users start paying for its services after a year of free usage.

There are reports that Google too was eyeing the company prior to FB’s acquisition of it. The world’s most popular search engine apparently wanted to buy WhatsApp for $10 billion at one point. It is also said to have approached the startup with a deal to let it know whenever there was any offer from anywhere else. Both offers were, however, turned down.

The secret of business biggies chasing a small turnover company most probably lies in WhatsApp’s potential to tap into every new smartphone user. While the app is widely used in the US and Europe, it is said to be more popular in Asia and Africa where people mostly access internet on their mobile phones. According to Koum, 5 billion people across the world would be using smartphones within the next 10 years. It is very unlikely that Koum and Acton will lose focus before achieving this goal. And FB sure knows it.

Small beginnings, big goals

When Koum and Acton set out to shape their dream app, messaging apps were already crowding the scene. Yet, they believed in themselves and their vision of giving the world something more. With around 50 employees and a nondescript office, they have scaled great heights and re-energised the world with new hope for entrepreneurs. Understanding people and giving them what they want lay at the foundation of this startup and its meteoric rise. The secret is out and only time will tell how many use it to script new success stories.

Check out recent mega tech mergers.

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