If you’ve been above ground at any point during the past week, you probably heard about Facebook’s staggering$19 billion acquisition of private messaging service What’sApp. Last Wednesday, Mark Zuckerburg bought his most expensive Facebook friend - the largest Internet deal in more than a decade.
It’s hard to really wrap your head around that kind of money. You could buy about 880 million Honda Civics, or half of the entire NBA. What does this app even do?
What’sApp is a mobile messaging application that works across all platforms. This means that users can exchange messages without having to pay for SMS fees. It’s a communication tool that replaces texting with chat. Here’s the surprising part: 450 million people use What’sApp each month, and 70% of these users are active every day. These users are sharing 400 million photos and 10 billion messages every day.
What’sApp alone has almost overtaken the entire global volume of SMS texts sent.
Many tech blogs suggest that Facebook has just bought out a competitor, but we think that the whole picture is even bigger. Zuck and co. aren’t just scooping up threats; they’re becoming a massive conglomeration.
Where is What’sApp most popular? In regions where Facebook isn’t. In regions like Latin America, Africa, and Eastern Europe, What’sApp reaches almost 90% of the mobile messaging market. These are places without reliable wireless carriers, places where data coverage is scarce and smartphones aren’t all that smart. What’sApp has given users in developing countries access to unlimited communication.
Perhaps this graph best illustrates why Facebook would gamble $19 billion on What’sApp’s future:
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After their first four years in business, Skype, Twitter, Gmail, and Facebook had barely scraped together 100 million accounts. In the same time frame, What’sApp has quadrupled these numbers. No one has seen What’sApp’s books yet - but it makes money by charging users $0.99 to download the app for a year. That’s $450 million annually. What’s more, Facebook will likely use the app as a stepping stone to introduce their social media platform to other parts of the world. Zuckerburg has essentially bought the world’s Rolodex, and he’s banking on seeing continued growth.
So what does all of this mean for us out here in the automotive sector?
I’ll tell you what it means for ActivEngage. We also have a vision to connect people through conversations. When a private messaging app of this magnitude is acquired, we take notice. But the buyout - Facebook’s biggest purchase to date - also speaks to how tech companies view live chat and SMS-free communication. The high minds in Palo Alto know that people prefer to chat over any other form of correspondence.
Some live chat companies are moving in the opposite direction by connecting chat with SMS texting. These kinds of mobile-chat integrations are messy, since it forces dealerships to use cell providers and carrier companies to deliver messages. This isn’t what users want.
Facebook’s acquisition proves that freedom is the best thing about the Internet. Freedom from SMS contracts and fees. Freedom to talk with customers on your terms. That’s why ActivEngage chat will always remain web-based, not tied down by texting regulations. We develop our software around the way consumers want to chat, the way that will get dealers more leads.