Why Facebook Should Have Never Bought WhatsApp
Photo © WhatsApp
Recently Facebook bought WhatsApp for 19 Billion dollars. For some people they may be asking themselves, “what the hell is WhatsApp?” and “really, 19 Billion dollars?”
For those unfamiliar with WhatsApp, it is an instant messaging service that is available on all smartphone platforms. The service allows users to create groups, similar to how BBM groups work. You’re able to share pictures, text, and videos with multiple users as opposed to one single individual.
Here’s why this purchase was a reckless waste of money.
1. The service is easily replaceable
Just like Facebook the service is easily replaceable. The market is saturated with good quality messaging applications like Viber, BBM, LINE, etc.
2. The product isn’t ground breaking
The product itself is not revolutionary or ground breaking. Lots of people use the service, but that does not mean these individuals will always use the service. The ways in which we communicate online is constantly evolving and changing. Facebook is a great example of this, as its predecessor Myspace held dominance over Facebook for several years. The potential for another company to develop a product similar to Facebook or WhatsApp and steal its user base is a serious and real concern.
3. There’s no way to recoup 19 Billion Dollars from WhatsApp
Any attempt to charge a monetary fee for the service will encourage users to find various other free messaging applications. People will not pay for a service they can get for free. This is no different than news companies charging users to read or view their content online. Some people will pay for this service, though the majority of people will go to a competitor who won’t charge them. WhatsApp lets users use the service for one year, afterwords they are charged 99 cents to continue using the service. This has been successful for two reasons.The first being that they do not ask for any money upfront, and give you a ton of time to use the service. The second is that the money they charge is not significant to most people.
Facebook and WhatsApp revenue streams are mostly limited to advertisement. Up until now one of the key selling points, which is a huge contributing factor to why WhatsApp has been so successful is that there is absolutely no advertisements associated with the application. Mark Zuckerberg, CEO and Founder of Facebook believes that “Facebook’s future depends on enabling users to access Facebook’s services on mobile devices, and generating ad revenue from those mobile interactions”. (Financial Post)
The problem with putting advertisements into a clean crisp platform such as WhatsApp is that it is a deterrent for users to use the service. It will push people away. I don’t see people responding well to any of the changes Facebook would like to make to the application.
4. Forcing integration pisses people off
An example of this would be what Google did to YouTube users by forcing integration with their social media platform Google Plus. Not very many things collectively piss the internet off; this was one of them. If advertisements won’t be used on WhatsApp, then Facebook will likely try to merge the service with their existing services and transfer over WhatsApp’s user base to their mobile platform. This will probably be done in a shady back handed way that will require users to have a Facebook to login to WhatsApp. Some people don’t have Facebook and choose to not use the service. I personally don’t see the need to integrate my Facebook with my instant messaging service. Then again, that’s a personal decision. I do know that if Facebook forces my hand I’ll respond by finding another service provider. I’m sure I’m not the only person who feels this way.
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