I have to admit that when I saw an article on Mashable that said Facebook shelled out $ 19 billion for a new investment, I was a little stunned. While Facebook has paid a fair amount of money over the past few years to acquire other, smaller networks like Instagram, this is by far the biggest purchase they’ve made to date.
So what did they buy? A service called WhatsApp. While not incredibly popular in North America, the app’s service boasts 450 million users worldwide. WhatsApp is designed to replace text messaging, and allows the user to send messages to their contacts, even if they don’t have the recipient’s phone number. There are several other similar services, but it appears that WhatsApp is the most popular. The service is free for the first year that you use it, then it’s just $ 0.99 a year after that. Text messaging rates are obviously much, much higher than that. This makes text-replacement apps very popular in countries that have less money to spend on expensive smartphones and data plans.
But why in the world would Facebook shell out $ 16 billion plus an additional $ 3 billion in stock to be given at a later date for an app that only charges users a dollar a year? Well, the answer seems to have several parts. Facebook’s founder, Mark Zuckerberg, says that the app is poised to have more than a billion users in the near future. But the bigger objective for WhatsApp is to be a building block for Zuckerberg’s bigger internet.org project. He hopes to bring internet access to the parts of the world that are not currently connected, as much as two thirds of the globe.
This is a big business and marketing move for Facebook, who is already no stranger to acquisitions. The company makes huge moves often; these decisions not only grow their bottom line, but are huge when it comes to marketing for Facebook. The social media network is setting itself up to be a huge player in the growth of the Internet around the world. I think it’s interesting that Zuckerberg also has some philanthropic notions, along with his desire to build Facebook into a worldwide sensation – even more so than it already is.
As business owners and employees, seeing the moves that Facebook makes is interesting because they’re pioneers when it comes to what’s next on the Internet. Smaller businesses are wise to pay attention; Facebook is the trend predictor of the Web. I think that it’s important to consider that the Web is growing, and quickly, even in countries that may not have had as much access in the past. When considering marketing campaigns, we’ll have to ask ourselves if our ideas will work on a more global scale. It’s certainly some food for thought!