Assessing WhatsApp's 5 years with Facebook

When Facebook bought messaging app WhatsApp five years ago, it looked like a complete mismatch of values. But recurring frictions haven't stopped WhatsApp from securing spectacular growth globally.

On February 19, 2014, social media giant Facebook announced it had acquired messaging service WhatsApp for a whopping $19 billion (€16.8 billion).

That takeover was viewed as an unholy alliance by many at the time, given the tie-up of two companies with misaligned principles, to say the least.

Founded in 2009 by former Yahoo employees Jan Koum and Brian Acton, WhatsApp had made a name for itself as a firm whose messaging service paid extra attention to user privacy and was opposed to ads, while Facebook wasn't quite like that, and still isn't.

When the marriage happened Corinne Purtill wrote for online portal Quartz that "Facebook was apparently surprised that privacy-minded WhatsApp would not renegotiate its pledge to remain ad-free; WhatsApp was apparently surprised that Facebook wanted to make money."

Technology | 01.05.2018

That sums it up pretty well, and the underlying clash of values led to quite some tension in the process, eventually seeing cofounders Koum and Acton leave the company.

In the fast lane

Despite the differences in views and outlooks, WhatsApp's past five years with Facebook have been breathtaking.

It now has roughly 1.5 billion users in 180 countries, thus being the most popular messaging app globally, even ahead of Facebook's own rival. WhatsApp itself says it's getting roughly 1 million new users every day.

Infografik Monatlich meist genutzte Messenger Dienste EN

India is the country where the messaging service boasts its largest user base. There were at least 200 million fans of the app in India last year, and the number is increasing fast. Some statistics indicate the user base in India may already have swollen to 300 million.

But there's something that could spoil the party in that country fundamentally. The Indian government is currently homing in on WhatsApp after the service has been used there to incite violence and spread pornographic material.

Government officials are asking for more oversight, going as far as requiring access to encrypted conversations. Parent company Facebook has so far refused to let this happen. WhatsApp may be in for a number of punitive measures. In the worst case scenario, Facebook/WhatsApp may be shut down in the country.

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Statisticians love WhatsApp, because it offers a myriad truly mind-boggling figures besides its huge army of followers.

-     According to web portal businessofapps.com, people send about 65 billion messages using the app every day — that's 29 million per minute globally (January 2018 stats).

-     The number of video calls made per day on WhatsApp amounts to 55 million.

Infografik Verbreitung von WhatsApp nach Ländern EN

(Figures from 2017, later preliminary calculations see the Netherlands and Spain in the lead)

Any business model?

And just in case you're wondering about how the ad-free app is making any money — well, it's not making an awful lot right now, especially after it dropped its $1-per-year fee in 2016. Facebook does not provide separate figures for its various segments.

But analysts say a couple of million dollars are now coming in through the WhatsApp Business segment, the company's first serious monetizing attempt, if you will, and meant to facilitate communication between small and medium-sized enterprises and their customers.

Businesses taking part have a day to respond to messages from clients, and if they're too slow, they're charged a fee.

Data collection under scrutiny

In Germany, Facebook was ordered earlier this month to decrease its data collection practices after a landmark ruling targeting the world's largest social network's market dominance to gather information about users without their consent.

Regulators particularly criticized Facebook for pooling data from apps, including its own WhatsApp and Instagram.

"In future, Facebook will no longer be allowed to force its users to agree to the practically unrestricted collection and assigning of non-Facebook data to their Facebook accounts," the Federal Cartel Office said in a statement.

The network was given 12 months to change its behavior. Last Friday, the company said it was appealing the office's decision before a regional court in Dusseldorf.

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