Facebook bought WhatsApp for a record fee of $19 billion back in February 2014.
At the time, no one seemed to put it together as to why Facebook will go the extra mile of shelling out such a huge amount of money for a mere instant messaging app.
WhatsApp developers had been very clear with their app’s model, stating that the messenger was only meant for mobile phones and that there won’t be any form of ads, games or gimmicks alongside the free version. While the ad business is what is considered to be the main source of revenue for most messaging apps that intent to go commercial with their business, many failed to understand why Facebook would buy such an app that has no provisions for ads or any definite business model.
As of now, it seems Facebook only bought WhatsApp mainly for the user-base growth prospects. Last week, the CEO and co-founder of WhatsApp Jan Koum made it public that the app now serves more than 900 million people on an active monthly basis. This is close to the 1 billion user base that Facebook’s CEO Mark Zuckerberg claims is the best to do business with.
WhatsApp has doubled its user base since Facebook took over
Since the February 2014 takeover, WhatsApp has been able to add more than 470 million users to its user base, up from around 430 million. In January, Koum announced that WhatsApp had reached 700 million users. Eight months later, the app has added more than 200 million to the platform, and if this trend keeps on, we might as well see the app reach the 1 billion mark before the year ends.
The rate at which this application is growing has for sure created enough buzz in the mobile app market, with many asking when Facebook intends to start monetizing this application. There are even some who claim that it is getting too late for Facebook to monetize the apps, which means that according to them, this social networking giant should already be reaping from this venture, and other such like Facebook Messenger.
Facebook has a den of unvalued valuables
Facebook has more than WhatsApp to its name. As noted above, the company also owns Facebook Messenger, an app that has a user base of more than 700 million people yet it has not generated any form of revenue for the company. Then there is Instagram, a photo-sharing app that can also form another major highway for revenue collection.
When monetized, these assets could make Facebook even bigger than it is at the moment. As of now, there is no doubt that Facebook is behind the two most popular messaging apps, WhatsApp and Messenger. On the contrary, WeChat has about 600 million users yet when it comes to revenue generation; the Chinese app is way ahead of these American apps. In short, Facebook is a den of unvalued valuables that when monetized, it will be interesting to see how it affects the company’s valuation.