Facebook’s $19 billion move you might not notice
(CNN) — What if Facebook spent $19 billion on something and most people never noticed?
The social media giant dropped that mind-boggling amount Wednesday on WhatsApp, paying 19 times more than it did for Instagram (or the gross national product of some small countries, if you prefer) for a texting app that most folks in the United States had never even heard of.
So what will this mean for the average Facebook user, or fans of WhatsApp, which lets users send unlimited messages for no more than 99 cents a year? In the hours after the deal became public, the prevailing opinion appeared to be, “Not much.”
“WhatsApp will continue to operate independently within Facebook,” CEO Mark Zuckerberg wrote Wednesday. “The product roadmap will remain unchanged and the team is going to stay in Mountain View,” the suburban California city where it’s based.
Zuckerberg also said that Messenger, Facebook’s chat app, and WhatsApp will remain separate.
So what’s the deal? Well, first, Facebook has demonstrated a willingness to scoop up successful mobile apps (a space where it’s weak compared to rivals Google and Apple, with their own operating systems and stores) then largely leave them alone.
Witness Instagram, which Facebook bought in 2012 for $1 billion. Active users were wary of the buyout, with some threatening to leave.
Since then, the photo app’s number of active users has more than doubled, even with the carefully crafted introduction of ads, which some people feared would junk up Instagram’s user experience.
WhatsApp has 450 million active users worldwide and is reportedly adding millions more each month on a path Zuckerberg and others believe will soon have it hitting the 1 billion mark.
And that’s probably where Facebook is really looking. While it may be lightly regarded in the U.S., where unlimited texting plans are the norm, WhatsApp has taken off in emerging markets like India, where traditional text-messaging can get expensive.
WhatsApp is free to download and costs a mere 99 cents per year after the first year.
“(T)here’s no other homegrown technology company that’s so widely loved overseas and so under appreciated at home,” wrote Jim Goetz of Sequoia Capital, the primary investor in WhatsApp.
With growth beginning to plateau in the United States, Facebook obviously is looking to places like India to keep growing. Zuckerberg also believes WhatsApp will help with the company’s internet.org initiative — an effort to provide Web access to the two-thirds of the world’s population that doesn’t yet have it.
“Our mission is to make the world more open and connected,” he wrote. “We do this by building services that help people share any type of content with any group of people they want. WhatsApp will help us do this by continuing to develop a service that people around the world love to use every day.”
Bringing in WhatsApp also creates a whole new brain trust for Facebook as it develops future mobile products. For a while, Facebook struggled with how to make money in the emerging mobile landscape. Investors have increasingly warmed to its stock as the company has shown more and more comfort in the mobile space, where an ever increasing number of users access its products.
So, if all signs point to Facebook remaining Facebook and WhatsApp remaining WhatsApp, there’s not much for users to be concerned about, right?
Well. Have you ever been on the Internet?
The move was met with predictable skepticism, much like the 2012 Instagram buyout and, really, almost any time a beloved tech startup gets gobbled up by one of the industry’s big-money behemoths.
“Facebook is like an evil parent that keeps finding the new hiding place for your diary,” Twitter user Shannon Self wrote, referring to the site’s habit of buying out emerging communication tools.
“Facebook bought #Whatsapp … Please be checking the security settings now … too many scandals are about to break out. Damn!” added Hemanth Kumar, a journalist from India’s Hyderabad Times.
Joked Rob Forbes, a DJ with South African radio station 5FM: “Waking up to the news that Mark Zuckerburg now owns all your nudes. Again.”
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By Doug Gross