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[whatsapp] WhatsApp Is Nearing a Billion Users—Now It’s Time to Find the Money

Whaaat?

WhatsApp—a quick, easy, inexpensive way to trade text messages and photos—is now the second-most popular app on Earth (not counting the apps Google and Apple bundle with their own mobile operating systems). Only Facebook’s own app reaches more people. Since Facebook purchased WhatsApp—and many questioned whether Mark Zuckerberg and company had grossly overpaid for the startup—the audience has more than doubled.

Tell me more!

Previously, WhatsApp was free for a year, after which the company would charge a mere $1 annually. Koum and company are now dropping the $1 fee completely. And in the months to come, they’ll begin experimenting with ways of generating revenue via the myriad businesses that use the messaging app.

Whatsapp has done really well in the consumer space, but there is whole other aspect of communication as you go through your day: You want to communicate with businesses.

Rather than picking up a phone or visiting some other app, you could just send a WhatsApp message to reserve a table and get your confirmation—the same app you likely used to make dinner plans with your friends in the first place. Maybe the restaurant replies with three different options and I just tap on a button and the reservation is made.

The move is part of a larger trend across the sprawling universe of mobile messaging apps. Facebook also offers its own Facebook Messenger, and under the guidance of former PayPal CEO David Marcus, it too is expanding mobile messaging into businesses, including airlines (checking flight statuses), online retailers (tracking orders), and Uber (getting a ride).

But the US isn’t really the market that matters to WhatsApp. While Facebook Messenger is more popular in the US, WhatsApp is dominant in places like India and Brazil and Africa. That’s why Facebook has two messaging apps: each is chasing the same goal, just in different places.

In these places, WhatsApp didn’t just remake online communication. It defined this communication. Now, because it’s so popular in places like India—and because there aren’t an enormous array of alternatives—WhatsApp has a good chance of becoming a hub for business services, just as WeChat is in China.

In the meantime, WhatsApp is working to expand the use of encryption on its service, an effort to protect user privacy. And it is moving beyond texts, photos, and videos to offer voice calls. Like Facebook and WeChat, WhatsApp is already more than messaging app. The question is just how much farther it will go.

My 2 cents:

Whatsapp’s monetization strategy will be best executed if it focuses on the markets it is dominant in, not only due to its relevance and “share of communications” but the mere fact that the technology wave hasn’t moved as fast in these regions. Much as WeChat pioneered the single source of services built into a widely popular messaging platform in China, Whatsapp has little to no competition in India and Brazil in pioneering the idea that you might never have to leave Whatsapp! The main stumbling block however might be the cyber-threats that come with online money transfer mediums; insert former PayPal CEO David Marcus’ expertise here.

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[whatsapp] WhatsApp Is How Facebook Will Dominate the World

Whaaat?

In North America, mobile Internet traffic is dominated by YouTube and Facebook. So says Sandvine, a company with an unusually good view of the world’s Internet activity. YouTube accounts for nearly 20 percent of all mobile traffic, and Facebook tops 16 percent.

But the situation elsewhere in the world may surprise you. Take Africa, for instance. In terms of mobile traffic, the continent’s most dominant service is a tool that many in the US haven’t even heard of: WhatsApp.

WhatsApp is the smartphone messaging app Facebook bought for about $22 billion last year, and according to Sandvine—which helps big ISPs monitor and manage all the bits moving across their networks—it accounts for nearly 11 percent of all traffic to and from mobile devices in Africa.

Tell me more!

This shows just how popular WhatsApp is across the continent, in large part because it lets people exchange texts without paying big fees to carriers. And it shows that people are using the service for more than just texting. Like other messaging services, it’s a way of trading photos and videos, too. And this year, the company expanded the service so it can make Internet phone calls, echoing services like Skype.

In a larger sense, this shows that the Internet is evolving differently in the developing world than it has here in the US. Because network and phone technologies aren’t as mature—and because people have less money to spend on tech—low-bandwidth messaging apps like WhatsApp have become a primary gateway onto the Internet as whole.

That’s why Facebook acquired WhatsApp. Mark Zuckerberg and company now have a sizable foothold in areas where the Facebook social network is less viable and, indeed, less popular. This means that, more than ever, the company can grab new Internet users as they come online.

And don’t forget: Facebook is dominant in the US as well. It accounts for more than 16 percent of mobile traffic and more than 2 percent of wire-line traffic. That means it has evolved to embrace the trend towards online video. And it means that the masses are embracing the trend from inside Facebook.

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