WhatsApp with That?
$19 billion seems like a lot of money to pay for a glorified chat app. So much so that the deal made significant headlines. So why did Zuckerberg do it?
Why is user base so important? Because it is the single greatest barrier to a fully online-based communication medium. Sure, WhatsApp and Facebook don't have the infrastructure of traditional wireless carriers like Verizon and AT&T, but they don't need it. The service simply piggybacks on the bandwidth of those old-guard carriers, the bill for which the users foot themselves. The real impediment to any app fulfilling this role to date has been the simple fact that nobody wants to use an app as their sole communications medium if it's limited to only those other users who also have the app. But the statistics seemingly indicate that WhatsApp has somehow found a way to overcome that impediment with astronomic growth never before realized by any other service.
Which brings us to $19 billion. If continued user adoption is the most important consideration for Facebook and WhatsApp to address, making a splash at $19 billion is a perfect way to do it. While tech-savvy millennials might have previously been in the know about the app, the recent news bouncing from wall to wall via Shares and Likes and blogosphere click-baiting has certainly put this app on the maps of even those layman who aren't quick to adopt. $19 billion immediately puts in a consumer's mind one very nagging question: for what? And at a price point of $0.00, it's very easy for any curious neophyte to scratch that itch.
But that still leaves us with a simple question. How is Facebook going to recoup that investment? Well, I imagine Mark, the brash young technocrat that he is, figures that if an app has the power to challenge and potentially revolutionize the current oligopoly of wireless carriers, making money should come as an easy second-trick.