WhatsApp might be poised to take over the world (provided it hasn’t already)

Check out this chart, which I found over on Quartz:


The dominant social messaging app all over the world (in terms of areas, not necessarily per capita) is a thing called WhatsApp, which I had admittedly only heard of once before today. It limits your sending to text and emoticons — it doesn’t care about the Asian chat app and sticker businesses cropping up, which is the focus of the above Quartz article — and its central business premise is that you can message over Wi-Fi, as opposed to racking up data usage charges on your phone bill. WhatsApp is four years old — so it’s vaguely a joke that I’ve never heard of it — and here’s some important data on it, via Reuters:

WhatsApp boasts 90 percent penetration among iPhone and Android smartphone users in several countries, including Mexico, Italy, and India, according to an app analysis firm Onavo Insights.

Then there’s this: WhatsApp has 350 million monthly active users. Between August 2013 and October 2013, they gained 50 million new users.

Facebook shouldn’t worry just yet — it has 1.2 billion monthly global users (but WhatsApp has about twice the number of users that Twitter does). It’s all part of a larger trend, though, and one that social networks should worry about: apps that are pulling people away from the networks. One solution for a social network could be to buy something like WhatsApp and integrate the technology, but the price could be steep. Consider this passage from Forbes:

The company also gave updated stats on its daily message flow: WhatsApp’s users are now sending 16 billion messages per day on average, receiving 32 billion, and sending 500 million images per day. That’s well above the 400 million photos receiveddaily by people who use Snapchat, a company that Facebook reportedly tried to buy for $3 billion.

WhatsApp is also popular — and cool by me — because it doesn’t sell ads, and as it doesn’t, it cites Tyler Durden.

Here’s a quick read on how/why WhatsApp got so big. Here’s the central thing to realize:

I bought into it because it’s something that telephone providers should have done but didn’t. Why should SMS cost money when I have an unlimited data plan? SMS is data. I don’t care how it’s implemented, it’s a few hundred bytes of data, and if you are telling me I need to pay 10 cents for it when I have a 5gigabyte data plan already, I’m sorry. I blocked all SMS messages on my plan a long time ago. Not because I can’t afford 10 cents, but because the pricing concept is downright wrong. Also, it’s often upwards of $1.00 for international messages, which is stupidly expensive.

Turning back to Forbes, an investor/analyst explains the success fairly succinctly too:

“They charge a modest fee for a service that replaces SMS,” said WhatsApp’s lead investor at Sequoia, Jim Goetz. “It’s private, and the vast majority of user are happy to pay.”

So by my count, here’s what is happening. It seems like a fairly logical evolution, in some respects. Things get big — phone companies, cable companies, Facebook — and they take liberties with users. For example, Facebook is now going to launch ready-to-roll video ads in your feed? That’ll alienate people. As the big guys alienate people through money-making moves/grabs, little guys crop up with better alternatives. Eventually those little guys become big guys, do dumb shit, and other little guys crop up and get a huge user base. That’s pretty much the cycle, no? You start small, you do something well, you get big, you take liberties, you start to become boring, and someone small comes up and starts chipping away. That seems to be how it works.

WhatsApp wants to stay independent, which could be true — or could be the equivalent of a football coach saying he’s happy at his current school. WhatsApp actually has some broader utility — kinda like Uber does — but some do think it could eventually become the Friendster of the messaging world if companies like those profiled in Quartz (top link of this post) start to jump on its market share and users. It should also be noted WhatsApp is doing all this with fifty employees.

I think I’ve said this six different times while writing this blog: Google didn’t exist 20 years ago. Can you imagine your life without Google right now? I can’t. Point is, things change and change quickly, and the trends adjust within a matter of months. People didn’t text actively in the mid-1990s. Now we have Facebook and Twitter, and their shares may get cut into by something called WhatsApp, which is also hitting phone companies in the wallet. There is not a soul coming back from WWII who envisioned this world, and there’s not a 20-something now who understands what this will all look like when they’re 65 (robots and Uber may run everything at that point). The WhatsApp story is cool, though. It’s either going to keep growing, get bought, or fade away as these sticker apps come into prominence. It’ll be interesting to see what happens.

Ted Bauer