{"id":592,"date":"2014-02-25T19:42:41","date_gmt":"2014-02-26T01:42:41","guid":{"rendered":"https:\/\/twprod.wpengine.com\/whats-up-with-whatsapp\/"},"modified":"2024-01-20T13:52:55","modified_gmt":"2024-01-20T19:52:55","slug":"whats-up-with-whatsapp","status":"publish","type":"post","link":"https:\/\/www.tailwindapp.com\/blog\/whats-up-with-whatsapp","title":{"rendered":"What\u2019s Up WhatsApp?: The Story of a $19 Billion Acquisition"},"content":{"rendered":"<p><i>Tailwind is no stranger to acquisitions. Just last year we acquired <a href=\"https:\/\/tailwindapp.com\/blog\/pinreach-acquisition\">PinReac<\/a><\/i><i><a href=\"https:\/\/tailwindapp.com\/blog\/pinreach-acquisition\">h<\/a>.<\/i><i> But we\u2019re a bit astonished at Facebook<\/i><i>\u2019<\/i><i>s recent $19<\/i><i> <\/i><i>billion acquisition of WhatsApp. We decided to dig around a bit to see if we can\u00a0<\/i><i>solve the mystery behind this earth-shattering acquisition.<\/i><\/p>\n<p style=\"text-align: center;\"><img fetchpriority=\"high\" decoding=\"async\" class=\" wp-image-4972 aligncenter\" title=\"What's Up WhatsApp?\" src=\"https:\/\/twprod.wpengine.com\/wp-content\/uploads\/2023\/04\/Whats-Up-with-Whats-App.png\" alt=\"What's Up WhatsApp?\" width=\"403\" height=\"403\" \/><\/p>\n<p>Let\u2019s be frank here- When <a href=\"https:\/\/facebook.com\">Facebook<\/a> announced that it would be acquiring <a href=\"https:\/\/www.whatsapp.com\">WhatsApp<\/a> for the hefty price tag of $19 billion, people freaked out. No surprise, since <a href=\"https:\/\/theawesomedaily.com\/11-things-that-are-cheaper-than-whatsapp\">you can buy a whole lot of stuff with $19 billion. <\/a>\u00a0Stuff that, when taken at face value, seems quite a bit more valuable than a tiny company with only <a href=\"https:\/\/www.informationweek.com\/software\/social\/facebooks-whatsapp-buy-10-staggering-stats-\/d\/d-id\/1113927\">55 employees<\/a> and 2013 revenues\u00a0of only $20 million. So what\u2019s the big deal?\u00a0 Read on to find out why this decision might not be a colossal mistake, although it is most certainly bold.<\/p>\n<p><strong>1. Untapped Potential<\/strong><\/p>\n<p>WhatsApp\u2019s main source of income is a $1 subscription fee after one year of use. Even though \u00a0Facebook has decided to allow WhatsApp <a href=\"https:\/\/news.en.softonic.com\/whatsapp-to-stay-independent-says-ceo-jan-koum-at-mwc\">to remain independent<\/a>, it is likely that additional monetization methods will come into play. Although the founders of WhatsApp have made clear <a href=\"https:\/\/www.mediapost.com\/publications\/article\/220139\/the-whatsapp-founders-hate-ads-and-thats-a-goo.html\">their disdain for in-app advertisements<\/a> (they don\u2019t even have a marketing department), perhaps the service will take a note from WeChat and add in-app purchases such as games and stickers. <a href=\"https:\/\/www.wechat.com\/en\">WeChat<\/a>, for those that don\u2019t already know, is the leading messenger app in China with over 300,000 users worldwide. Although, according to Chinese news website Xinhua, <a href=\"https:\/\/news.xinhuanet.com\/info\/2013-10\/23\/c_132824301.htm\">users amount to something closer to 600,000.<\/a> Regardless, it\u2019s a lot of people. If Facebook can find the right way to monetize the platform (<a href=\"https:\/\/www.forbes.com\/sites\/adamhartung\/2014\/02\/24\/zuckerbergs-3-smart-leadership-lessons-from-facebook-buying-whatsapp\">as they did with Facebook itself after<\/a> a few years of research) there is definitely potential for some serious cash. Just for the sake of comparison, (<a href=\"https:\/\/thenextweb.com\/asia\/2014\/01\/24\/messaging-stop-comparing-wechat-whatsapp\">although the two apps are radically different in both user-base and monetization methods<\/a>) just look at WeChat, which is<a href=\"https:\/\/www.economist.com\/news\/china\/21594312-can-wechat-become-world-beating-app-nice-little-earner?_ga=1.117601289.1691378363.1393373283\"> estimated to earn $1.1 billion this year.<\/a><\/p>\n<p><strong>2.\u00a0Global Reach and Relevance<\/strong><\/p>\n<p>WhatsApp has an incredible adoption rate. \u00a0As 2013 drew to a close, <a href=\"https:\/\/www.forbes.com\/sites\/hollymagister\/2014\/02\/21\/whatsapp-19-billion-secret-formula\">25 million unique users were signing up each month. <\/a>\u00a0Almost 1 million users <b>PER DAY<\/b>. That&#8217;s not to mention the <a href=\"https:\/\/techcrunch.com\/2014\/02\/19\/facebook-whatsapp\">450 million users that were already logging on each day.<\/a> But that&#8217;s not even the best part. These users come from countries all over the world, many of which are developing countries that show slow adoption of Facebook. The acquisition allows Facebook to remain relevant in those countries. Additionally, the move helps Facebook deal with the general shift away from laptops towards mobile devices. Some <a href=\"https:\/\/techcrunch.com\/2014\/02\/19\/facebook-whatsapp\">would even go so far to say that,<\/a> in order to remain competitive on the mobile front abroad, Facebook had no choice but to acquire WhatsApp, regardless of price.<\/p>\n<p><strong>3. People generally don\u2019t appreciate being advertised to<\/strong><\/p>\n<p>It\u2019s true. When I\u2019m playing an epic round of <a href=\"https:\/\/flappybird.io\/?game\">Flappy Bird<\/a> and a flashy banner ad pops up, ruining my concentration and causing my adorable avian friend to slam into a green pipe, I\u2019m not a happy camper. This is why <a href=\"https:\/\/qz.com\/120797\/over-one-fifth-of-people-use-ad-blocking-software-and-its-beginning-to-hurt\">ad-blocking software is so popular.<\/a> We\u2019ve seen it on all major social media platforms, and it&#8217;s the same thing on mobile- marketers have to find a way to monetize without being \u2018in your face\u2019 about it. On Pinterest, we have to form our profiles <a href=\"https:\/\/tailwindapp.com\/blog\/pinterest-profile-guide\">in accordance with what the followers want,<\/a> not with what we want them to want. The anti-advertising stance of WhatsApp\u2019s creators means that they will continue to innovate in a way that doesn\u2019t rely on ads. Zuckerberg even <a href=\"https:\/\/techcrunch.com\/2014\/02\/19\/whatsapp-will-monetize-later\">said<\/a> \u201cI don\u2019t personally think ads are the right way to monetize messaging.\u201d So essentially, acquiring WhatsApp allows Facebook to get around the mobile advertising problem with a team that is practically founded on a their disdain for it.<\/p>\n<p><strong>4. Cheap to Maintain<\/strong><\/p>\n<p>As we said before, WhatsApp only has 55 employees. At first glance this may seem like an incredibly small amount of people, certainly not worth forking over $19 billion for. However, this tiny group of people is managing to successfully cater to a user base of over 450 million. <a href=\"https:\/\/www.businessinsider.in\/Everyone-Who-Thinks-Facebook-Is-Stupid-To-Buy-WhatsApp-For-19-Billion-Should-Think-Again--\/articleshow\/30737821.cms\">As Henry Blodget noted at Business Insider,<\/a> \u201cassuming an all-in cost of $200,000 per employee, that\u2019s a total cost base of $11 million. [Assuming] WhatsApp grows to \u2026300 employees over the next few years\u2026 it will have a cost base of only $50-$75 million.\u201d He goes on to note that if the company manages to continue its insane growth, \u201cit could easily be pulling in more than $1 billion a year of revenue in a few years. Almost all of that would be profit.\u201d There are no marketing costs to configure either, considering the WhatsApp creators are happy to just let the app sell itself.<\/p>\n<p>So that about sums it up. It looks like Zuckerberg might not be quite as insane(or inept, depending on who you ask) as many pundits would have us believe. But will the popular messaging app really be able to recoup $19 billion in revenue? Only time will tell.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tailwind is no stranger to acquisitions. Just last year we acquired PinReach. But we\u2019re a bit astonished at Facebook\u2019s recent $19 billion acquisition of WhatsApp. We decided to dig around a bit to see if we can\u00a0solve the mystery behind this earth-shattering acquisition. Let\u2019s be frank here- When Facebook announced that it would be acquiring &hellip;<\/p>\n","protected":false},"author":19,"featured_media":593,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_block_theme_hide_title":false,"footnotes":""},"categories":[16],"tags":[],"class_list":{"0":"post-592","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-marketing","9":"with-featured-image"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.5 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What\u2019s Up WhatsApp?: The Story of a $19 Billion Acquisition - Tailwind Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tailwindapp.com\/blog\/whats-up-with-whatsapp\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What\u2019s Up WhatsApp?: The Story of a $19 Billion Acquisition\" \/>\n<meta property=\"og:description\" content=\"Tailwind is no stranger to acquisitions. Just last year we acquired PinReach. But we\u2019re a bit astonished at Facebook\u2019s recent $19 billion acquisition of WhatsApp. We decided to dig around a bit to see if we can\u00a0solve the mystery behind this earth-shattering acquisition. Let\u2019s be frank here- When Facebook announced that it would be acquiring &hellip;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tailwindapp.com\/blog\/whats-up-with-whatsapp\" \/>\n<meta property=\"og:site_name\" content=\"Tailwind Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Tailwind\/\" \/>\n<meta property=\"article:published_time\" content=\"2014-02-26T01:42:41+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-01-20T19:52:55+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tailwindapp.com\/wp-content\/uploads\/2023\/04\/Whats-Up-with-Whats-App.png\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Caleb Yen\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@TailwindApp\" \/>\n<meta name=\"twitter:site\" content=\"@TailwindApp\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Caleb Yen\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp\"},\"author\":{\"name\":\"Caleb Yen\",\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/#\\\/schema\\\/person\\\/db66ffb6a045519c3976b9703622d3b9\"},\"headline\":\"What\u2019s Up WhatsApp?: The Story of a $19 Billion Acquisition\",\"datePublished\":\"2014-02-26T01:42:41+00:00\",\"dateModified\":\"2024-01-20T19:52:55+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp\"},\"wordCount\":825,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.tailwindapp.com\\\/wp-content\\\/uploads\\\/2023\\\/04\\\/Whats-Up-with-Whats-App.png\",\"articleSection\":[\"Marketing\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp\",\"url\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp\",\"name\":\"What\u2019s Up WhatsApp?: The Story of a $19 Billion Acquisition - Tailwind Blog\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.tailwindapp.com\\\/wp-content\\\/uploads\\\/2023\\\/04\\\/Whats-Up-with-Whats-App.png\",\"datePublished\":\"2014-02-26T01:42:41+00:00\",\"dateModified\":\"2024-01-20T19:52:55+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.tailwindapp.com\\\/blog\\\/whats-up-with-whatsapp#primaryimage\",\"url\":\"https:\\\/\\\/www.tailwindapp.com\\\/wp-content\\\/uploads\\\/2023\\\/04\\\/Whats-Up-with-Whats-App.png\",\"contentUrl\":\"https:\\\/\\\/www.tailwindapp.com\\\/wp-content\\\/uploads\\\/2023\\\/04\\\/Whats-Up-with-Whats-App.png\",\"width\":800,\"height\":800,\"caption\":\"Graphic with a green background and the WhatsApp logo, featuring the text \u201cWHAT\u2019S UP APP? 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