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The very biggest tech news this month may very well be Facebook buying WhatsApp for a very cool $19 billion.
“A million dollars isn’t cool. You know what’s cool? $1 billion.” — Mark Zuckerberg
If $1 billion is cool, $19 billion is downright hot. So what made WhatsApp so hot?
What Is WhatsApp?
WhatsApp is a mobile app for messaging that you can use instead of your standard text messaging service with your cell phone carrier. With WhatsApp you can send free messages to other WhatsApp users no matter:
- which cell phone service you use
- which cell phone you use
- where in the world you are
WhatsApp has 450 million active users per month and reached that number faster than any other service.
WhatsApp is free for the first year, then costs 99¢/year after that. The cost is low enough so that everyone can afford it but keeps the spammers and idle users away, freeing up the service for those who care enough to spend 99¢.
While the price of using the app is small, the revenue is large enough to allow the developer to offer the service ad-free. See, WhatsApp, Why We Don’t Sell Ads.
Why Use WhatsApp?
When you use WhatsApp, you don’t have to worry about going over your text messaging plan, whether your friend is on iMessage, BlackBerry Messenger or other proprietary messaging service.
You can send files for free, including photos, videos, music and voice messages. Even unlimited text messaging plans may charge you for sending these files via text message. You can also share your location and contact information using WhatsApp.
Many carriers in the US charge per text message or charge high fees for unlimited plans. When we returned to the US from the UK, I originally bought a plan for my teenage daughter that allowed 200 free text messages per month (with 25¢/text over 200). A few days later I realized my folly, cancelled the plan and returned her phone to the store, opting for a different carrier that offered unlimited texting in a lower priced plan.
Popularity begets popularity. Because WhatsApp was one of the first alternative text messaging apps launching in May 2009, it quickly gained a broad audience, making more likely that those joining already had friend using the app.
How to Use WhatsApp
WhatsApp is simple to use. WhatsApp uses your cell phone number so you don’t have to figure out what your friends’ user ID for the app is. When you download the app, you confirm your cell phone number and allow the app to access your contacts.
WhatsApp confirms your cell phone number with a text message that contains the confirmation code. Tap on that code or enter it in the keypad with the app.
You’re greeted with a Welcome page and then invited to add your name, a profile photo and connect to your Facebook account.
WhatsApp finds your contacts who are using WhatsApp and lets you create a Favorites List. You can also create Groups for chats with multiple friends.
Availability
WhatsApp is available free for the first year, then 99¢/year, for:
The WhatsApp Journey
Curious about how WhatsApp grew from $0 to $19 billion in under 5 years? Check out this infographic illustrating the meteoric growth of WhatsApp:
See, The Awesome Daily, 11 Things That Are Cheaper Than Whatsapp (including Iceland).
Your Thoughts
Do you use WhatsApp? Have you been looking for a free messaging app? Do you think Facebook made a wise investment? Do you wish you had invented WhatsApp? Let us know in the Comments section below!
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In honor of International Polar Bear Day, Google Earth released 360° photos from Churchill, Manitoba, Canada, the Polar Bear Capital of the World.
If you can tolerate seeing amazing pictures of snow (and if you live in an area that has had a harsh winter, you may not be able to), check these out:
Head to Google Earth to see these amazing views in their 360° beauty.
Hi Carolyn,
I’m curious as to where Facebook got the $19 billion. They seem to be popular with investors. Maybe too popular? I don;t send many texts messages. I sent some today. I had my default font changed and today it changed itself, so I asked someone to check it. Then I realised Jetpack updated earlier and so checked that out. It was because of that update and it deactivated too. I think it’s working good now though. Are your comments working? That is the question! 🙂
Hi Mike, Yes, my comments are working, thank you very much for checking!
Facebook is paying $4 billion in cash and $15 billion in stock so don’t worry about their coffers being emptied by this deal. But the price must make the former owners of Instagram wonder if they sold too cheaply!
I’ve never heard of default font changing accidentally, that’s a new one. Looks like you’re using Tahoma on A Zillion Ideas. I find Jetpack stats convenient, if inaccurate, so I keep it installed in spite of its idiosyncracies. But I know many people who have deleted it from their blogs.
Why Facebook Buy Whatapp $19 billion ? They don’t know its free. Me also download free on Google play store.. I am Joking Carolyn, I like whats app its amazing massaging service where we can send video easily. Great article thanks
Hi Mahendra, Yes, I’m wondering if Facebook knew that they could get the first year of WhatsApp for free… 😉
Yes, WhatsApp has a lot to offer which is why its popularity has grown so rapidly. The fact that Facebook bought it for so much money will probably get even more people to check out WhatsApp.
I hope you enjoy using WhatsApp, Mahendra!
Hi CAROLYN I have a Question for you, Me using Both Whatapp and Facebook but as your experience can you tell me which is best and which is going to most popular in future ?
Hi Rosan, Welcome to The Wonder of Tech! Great question. Both Facebook Messenger and WhatsApp offer messaging services that can be used as a substitute for your text messaging plan on your cell phone. The real question for you is which service will your friends be using more? You can try both and see which one your friends are using. It’s free so no harm in trying both.
Alternatively, you can wait and see whether Facebook will somehow be merging the services after the deal closes.
It happened that I was looking the trends at few of angel investors sites when the sale happen. Actually this was the hottest topic for a couple of days. I don’t think that Facebook was the only company that both all shares.
Hi Kaloyan, Yes, this buyout of WhatsApp by Facebook made huge tech news in February, mostly because of the price. This type of payout will certainly give developers incentive to become the next “WhatsApp” and perhaps launch even more innovations in the future!
What a great infographics easy to understand and i think Facebook is intelligent that’s why they have bought whatsapp at any cost. and great deal for whatsapp founders.
Hi MM, Welcome to The Wonder of Tech! Yes, the story of WhatsApp has to be one of the greatest success stories in tech and perhaps in all of business. Time will tell whether Facebook got a great deal or paid way too much.
I have WhatsApp on my iPhone Carolyn but I’m not a regular user.
I guess it’s maybe because most of my contacts don’t use it otherwise I’d probably use it more.
I hadn’t realised there was a charge. I’ve had the app for more than a year and have never been charged.
Although I think I paid for the app when I downloaded it so maybe I bought an upgrade or something?
Hi Tim, Maybe if you tried to use it you would be charged? Yes, it really depends on whether your friends use WhatsApp and whether you have an unlimited text message plan. If you do then you don’t need to use WhatsApp much unless you’re sending files or using it internationally.
You could be right Carolyn!
I’m not sure though. I had a look in the payment info section and under service it says Lifetime.
I’ll send someone a message and see.
Hi Tim, I did some research and you’re right, WhatsApp started off as a paid app. Your investment in WhatsApp will probably pay off over time. Whether Facebook’s investment pays off over time remains to be seen…
Hi Carolyn,
I was curious what WhatsApp was all about. Now, I know! Thanks. I don’t have any messages with my cell phone plan. I never thought I’d use them. They do come in handy though. So, I’m looking forward to using this.
Hi Sherryl, Yes, in the beginning, I didn’t have a text message plan on my phone at first and then I would get annoyed at any text I got because it was costing me money. I eventually signed up for a 200 message plan that serves me well. That plan isn’t offered anymore, but I’m grandfathered into it at AT&T.
Using alternative, free messaging apps such as Facebook Messenger, WhatsApp and iMessage can help you keep costs down. Who wants to spend a quarter on a text message if you don’t need to?
Hi Carolyn,
You are so lucky to be under a grandfathered AT&T plan. We have a family plan and my # is an additional $9.99 a month. My husband got his smartphone way before I did and his grandfathered portion of the plan includes 20GB of data for $25 and 200 messages for $5. (Naturally, he uses a fraction of each.)
When I recently acquired my smart phone, the best they would offer me is 300MB of data for $20. That’s it. If I use 301MB, they’ll charge me an extra $20 that month. – Unless, I upgrade my plan before I go over. Then, I’d get and extra GB for $10 – (but that would permanently be my new plan).
AT&T frustrates me so much. I don’t even want to deal with them anymore! 🙂
Hi Sherryl, Yes, I am grandfathered in for AT&T’s voice, text and data plans so I have good deals on each. The good news is that the cell phone service market is getting much more competitive now. Definitely compare plans the next time you’re up for renewal, both with major carriers and smaller carriers such as Virgin Mobile https://wonderoftech.com/smart-and-cheap-2/ and Ting https://wonderoftech.com/ting/. Be sure to check coverage maps to be sure that a carrier has service in the areas where you need it most.
Thanks Carolyn. I will definitely shop around next time. We recently renewed because both of us were in the market for phones and the upgrade prices were attractive. That, plus the reception here is really good. With all this competition and new towers, I probably won’t run into the issues now that we used to run into. I still remember having to go outside and stand in the middle of the lawn to get cell phone reception at one point. LOL
Yes, Sherryl, reception really is key. It doesn’t matter what a great deal you get if you have no signal where you need it!
Hi Carolyn,
I have never tried WhatsApp, but when I read the news, I started to think that I should read more about it. I understand why Facebook want it, but it’s hard to understand how it can be worth $19 Billion. But, that’s why I’m not the head of Facebook or any other large company. Too much money makes my head spin 🙂
Hi Jens, You’re right, I think only Facebook really knows why WhatsApp was worth $19 Billion to them. I can’t imagine being at the bargaining table representing WhatsApp and turning down an offer of $18.5 Billion. “Sorry, but I can’t take a penny under $19 Billion.”
I really like what’s app conceptually, but I question the valuation. Facebook for example has a gigantic amount of track dependence from their gigantic entrenched userbase. (I know people say another social service could come along but it’d really surprise me. ) What’s App seems very vulnerable from either tech changes or new competitors. Also, gigantic growth rates just traditionally lead to overvaluation, people think they may continue for an extended period of time without taking into account potential market saturation.
Also I learned this late but not everyone is interested in saving money some people just want a really dependable solution.
Hi David, Welcome to The Wonder of Tech! You’re right, exponential growth doesn’t last forever and can lead to over valuation. Facebook experienced exponential growth but will reach saturation at some point. Perhaps Facebook is looking for geographic expansion in areas where WhatsApp is more popular than Facebook. Perhaps Facebook wants to leverage the customer base of WhatsApp for other purposes.
Time will tell whether the $19 billion was a bargain or a bust.
Hey Carolyn,
You know this is all new to me. I’ve never heard of Whatsapp but not I’m going to do some more research in it LOL… that is a great deal for text messaging! I really don’t understand why facebook is buying it. I must be missing something. Thanks for the share!
Hi Sherman, WhatsApp is free for the first year, so you should give it a try to see which of your friends is using it. You may find that WhatsApp can be a great substitute for your cell phone messaging plan. If you find you don’t like it, you can just delete it!
I am using WhatsApp in regular basis to contact with my group member.
Why Facebook thinks it worth $19 billion ? I really don’t know 🙂
But if you calculate cost per user then you’ll find that Facebook only pay $35.56 per user and which is pretty low in compare to other famous tech acquisitions
Please check this image for details Chart – http://i.imgur.com/IZtkcGF.png
Hi Swarup, Excellent point. At that price per user the WhatsApp acquisition seems to be a very good deal.
Yes Carolyn,
Before check that image I thought its a big acquisition and facebook spend lots of money but one of my friend share this image with me in facebook and after check that image I discover that facebook done a good deal in cheap price 🙂
Yes, thanks so much for sharing that image with us, Swarup!
Yes, thanks so much for sharing that image with us, Swarup! It’s helpful to illustrate the per user price of WhatsApp.
Hello Carolyn,
I use this app a lot and I appreciate the fact that it transcends networks and OS. When I heard that it was sold out, I immediately recognized Mark’s business genius. Who but a genius sees potential in the bud?
The only problem I had was that their founders sold out too soon! With time, they would have been worth 20 times more than that! Remember the then huge amounts Mark refused to sell Facebook for?
Always,
Terungwa
Hi Terungwa, It’s great to hear from a WhatsApp fan. Yes, those who enjoy using this app can understand Facebook’s purchase. Yes, one of the keys in business is knowing when to take the money and when to hold out for more. It would be hard to imagine turning down a whopping $19 billion though!
Hi Carolyn,
I first heard this WhatsApp froim Linkedin but dunno exactly how it works. You explained it really well in your blog. I like the idea of WhatsApp. You know we pay $20/month for our unlimitespd service of text messaging. With 99¢ a year, you can’t beat that price.
I will tell hubby about this and see if we could use this instead. Perhaps we can save $240/year. No wonder this is worth 19 billion. I guess Facebook is going to replace their Messenger soon, I heard. Anyway, thanks for giving us this valuable information.
Have a great week.
Angela
Hi Angela, Thank you, I’m glad this was helpful to you. What’sApp is free for the first year, so why not give it a try? You could see which of your friends are using WhatsApp and see if it can help you save money on your cell phone plan. If it doesn’t work well for you, you can always delete the app.
I hope WhatsApp works well for you, Angela!
It is one of the biggest application acquisitions so far. And WhatsApp was surely worth this much, it’s a great app, billions of users use it every day and millions of new people starts using it everyday. It has a great growth potential. Now, let’s see where Facebook takes it.
Hi Vicky, Yes, you’re right, WhatsApp is a huge acquisition by Facebook, certainly a success story for the record books. Facebook must have big plans for WhatsApp to spend that much money on the app!
Hi Carolyn,
I just think, if Facebook can be purchased WhatsApp at a price of $19 billion, then actually how rich Mark Zuckerberg?
Hahaha .. I think it’s amazing! :-bd
I use WhatsApp. I like this app because it is simple and user friendly. I found that the inventors WhatsApp make this app because he did not like the ads. With the simple reason that could make this app, it deserves to be appreciated, right? =D>
Looks like Facebook has its own plans to have WhatsApp, I can not wait to see where this story will be anchored. 🙂
Thanks for raised this discussion, Carolyn.
I really appreciate it.
Regards,
Nanda
Hi Nanda, Great to hear from a WhatsApp fan! Yes, it will be very interesting to see what Facebook does with WhatsApp. They likely have big plans for the service in the future.
Hi Carolyn,
Facebook is well established in North America and Europe, while WhatsApp users are mostly third world countries, in Africa and Asia.
and of-course Facebook was not interested in the application itself, because we know that the Facebook Messenger application is already providing almost the same features and doing well, so it’s not the Application that’s worth 19 billion dollars, it’s it’s market and it’s users.
now Facebook have the second largest database of People from all over the Globe, behind Google, and that’s worth by far more than 19 Billion.
Many thanks and Best wishes!
Excellent point, Mitch. Yes, this could be a good deal for Facebook if it expands its user base geographically. If WhatsApp drives a massive expansion of Facebook into new territories, then the money would be a wise investment.
This was the mega deal and I think biggest deal in online history. Whatsapp is now the way people chat! People don’t say send a chat msg on whatsapp but people say whatsapp this. So we can say it has a great brand established within a short period of time. Very nice infograph it is. Thanks Carolyn.
Hi Atish, Yes, when people start using a trademark as a verb, you know it’s a hit! It will be very interesting to see what Facebook does with this app.
Hi Carolyn,
First, Instagram and now WhatsApp 😉 Glad they keep ’em operated independently.
Apart from praises and criticisms about the whole deal, I find Facebook is almost ready for the Mobile World we are proceeding into. Not just developed counties, but gonna be ready when the whole World can’t live without handheld devices.
I love the facts that one developer supports 14 million users and no penny invested on marketing 😉 Surprising!
From the business perspective, I believe this is a huge investment with long term planning. We can see how Instagram embraced mobile users. Users are the product, as they say in business terms 😉 Facebook isn’t about the free service we have been enjoying, eh?
I’m not a fan of WhatsApp, as I’m in the back seat when it comes to using third party apps for personal conversations, Carolyn. Security breaches reinstate my thought. Yeah, I know privacy is almost dead online though. However I like the features integrated and most of my friends with smartphones are huge fans too.
Do you think some WhatsApp feature will be implemented in Facebook’s Messenger app too? or vice versa?
Enjoy the rest of your week, Carolyn 😉
Cheers…
Hi Mayura, Yes, I do believe that Facebook will integrate its services into WhatsApp and vice versa. You’re right, it’s not often that companies succeed so rapidly, especially with a $0 marketing budget. But when a service fills the needs of its users then word of mouth can be even more powerful than any marketing campaign.
As my messaging conversations would put any surveillance officer to sleep, I don’t worry too much about privacy concerns. But for those who want the utmost in security, they may want to investigate all options.