WhatsApp Suddenly Looks Like A Huge Threat To Facebook; WhatsApp got more than 300 million users and carries 25 billion messages every day

WhatsApp Suddenly Looks Like A Huge Threat To Facebook

JIM EDWARDS OCT. 1, 2013, 10:39 AM 7,931 4

Facebook CEO Mark Zuckerberg has twice addressed the issue of whether the social network is losing traction among teens recently, and twice he’s said that it’s a non-issue. Facebook isn’t seeing a decline among younger people, he says (although he admits it’s not as cool as it used to be.) He might want to look again at WhatsApp Messenger, the group messaging service that is huge outside the U.S. and gaining ground within it. It’s got more than 300 million users and carries 25 billion messages every day.WhatsApp’s group messaging function appears to be increasingly used as a replacement for Facebook’s groups function, especially among extended families, in schools and anywhere someone needs a convenient way of mass-texting a small group of known associates.

Because you can only communicate with people who are already your contacts, WhatsApp seems like a much safer, more private version of group messaging. On Facebook, anyone can contact anyone else (assuming you haven’t locked down your privacy settings).

Both Facebook and Google, with Google+, have tried to dominate group messaging. But WhatsApp appears to have nailed the formula.

Here’s why families love WhatsApp, according to Grizzy Analytics’ Bruce Krulwich. He’s a former Samsung trend analyst:

Teens and young adults are increasingly using WhatsApp not only for traditional messaging, but also for the more general and long-term “staying in touch,” including sharing status updates and pictures, that has traditionally been the heart and soul of social networking on Facebook (FB).

High school classes have created a WhatsApp group for the whole class, not for serious messages that everyone needs to see, but for sharing status updates and pictures. Their parents are happy, because using WhatsApp avoids a lot of the personal safety concerns of sharing personal details on Facebook.

WhatsApp is tearing off chunks of the non-U.S. market, where Facebook is not as dominant. Here’s what’s happening in Israel, per Haaretz:

WhatsApp, the smartphone app that started as a nice, free application for text messages has become a social network on its own, thanks to the function that allows users to define their own chat groups. Close-knit groups of friends and relatives stay active all the time, and provide updates in real time. Everyone is there, from cousins, to classmates to groups from the workplace and the neighborhood.

And in South Africa, WhatsApp is now more downloaded than Facebook is (of course, Facebook is more likely to come as a native app already on the phone).

(Let’s not mention that Saudi Arabian courts grant divorces made over WhatsApp, even by accident.)

Rumors say WhatsApp may be worth $2 billion in an acquisition. Not bad for a company that has only 50 employees and only $8 million in venture funding. A few months ago, Google was apparently considering acquiring the company. So far, that storyline has come to nothing.

Facebook is the only other company that is big enough, and threatened enough, to also be an obvious interested party.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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