Editor’s note: This article was first published in December 2012 and reports talks between Facebook and WhatsApp based on a TechCrunch report at the time. No deal followed then; Facebook announced its acquisition of WhatsApp in February 2014 for about $19 billion.
According to TechCrunch, Facebook has approached the founders of WhatsApp to negotiate the social network’s purchase of the company. Neither company has confirmed or denied the rumour. We will take it as true, because buying WhatsApp would be one of the best decisions Zuckerberg could make.
WhatsApp is estimated to have brought in revenue of around $600 million, and the app is likewise estimated to be installed on more than 900 million mobile devices. By acquiring the company, Facebook would not only gain some juicy extra revenue and reach a bigger market, it would also get rid of its biggest competitor.
The fact is that, if we stop to analyse it, Facebook currently has no competition as a social network, and probably won’t have any, however hard new or existing social networks try at this stage. As we said only yesterday, the danger for Facebook is that users start to get tired of it or that, with the rise of mobile devices (Facebook’s weak spot), users end up dropping the social network in favour of the famous WhatsApp, which, when all is said and done, supports all kinds of features that over time could make it an ideal social network for mobile devices.
There is a well-known saying: “If you can’t beat them, join them.” In this case, if you fear your competition, buy it, and that is probably what Mark Zuckerberg is doing.
So far no information has come out about the amount being negotiated, although we could expect a figure of around $1 billion, which wouldn’t be bad at all for WhatsApp’s founders.
If the news is confirmed and the purchase goes ahead, Facebook would clear up many of the market’s doubts about its mobile revenue.
Featured image: StockyPics, CC0 1.0, via Flickr.
