Who's On WhatsApp, and Why?

theodp writes "In announcing its $16B acquisition of WhatsApp, Facebook confessed it had very little data on WhatsApp's estimated 450 million users. Asked about the user data, Facebook CFO David Ebersman said, 'WhatsApp has good penetration across all demographics but you are not asked your age when you sign up.' Wall Street analysts concerned by Ebersman's answer won't be comforted by GeekWire reporter Taylor Soper's (non-scientific) poll of UW students, which suggested that WhatsApp may not exactly be BMOC (Big Messenger on Campus). 'I don't use it at all,' replied one UW junior. 'I've heard of it but I have so many other things I do online that it would just be another time-consuming thing. I use Facebook or texting to talk to people.' WhatsApp did fare better in a survey of Soper's Facebook network, where responders said they used WhatsApp mostly for communicating internationally and in groups. So, are you or someone you know using WhatsApp, and what's the motivation for doing so?"

Nope

[Warbothong]

I use email.

How do they break even?

[satuon]

So will WhatsApp bring more than 16 billion in net profit throughout its lifetime?

Because that would be needed to break even on the price they paid, that, or to find someone else to pay 16B or more. At 450 million people, that would require each one of their users to pay $35 dollars for 16B dollars revenue, not profit. If their users are 7 billion instead (the entire world population), that would require $2-3 dollars from each one.

I have WhatsApp installed on my smartphone, and the only reason I use it is to NOT PAY for sending SMS messages. That's what their user-base is - people who don't want to pay. How they plan on getting more than $35 from each and every one, is beyond me.

Re:How do they break even?

[Viol8]

Don't look for logic in these sorts of aquisitions anymore - its another tech bubble getting ready to burst. Its a pity Zuckerberg couldn't have taken a leaf out of Bill Gate's book and used that 16 billion for something more productive instead of buying another flash in the pan dot.bomb

"won't be comforted"

[Anonymous Coward]

A few college students in America say they don't use it.

But so what if _all_ college students in America don't use it? College students in America are Facebook users already; they aren't why Zuckerberg bought WhatsApp.

There's a big wide world out there, theodp.

An IM service for 19 Billion....

[Farmer Pete]

Am I the only person who can't understand why anyone in their right mind would pay 1 billion, (let alone 19 billion) for a company that pretty much just does IM for phones? I mean, there are a ton of instant messengers out there. Most have good phone integration. Whether this will break even for Facebook or not is a given. It wont. They may not loose their shirt, but there is no way they are going to make their 19 billion back from a company with 40 million in revenue. The math doesn't add up. Even if paying ~$40 a user was a good move for a company like FB, there is no reason people will stay on WhatsApp if they don't want to. It's not like FB where leaving can be tricky if you have a lot of content there you don't want to loose access to. You aren't going to see a mass exodus of FB, but within a matter of months, you could in WhatsApp. Having said that, the creators of WhatsApp get massive props. Creating a platform that does something that 50 other competitors have and are already doing, and then selling it for 19 billion dollars is massively impressive. With these numbers, I'm going to have to reevaluate Blackberry's stock price. Valued currently at under 5 billion, BBM has to be worth at least 10 billion by itself. Which means the stock should double in the next few days, as Google looks to acquire BBM to compete with Facebook.

Re:my daughter

[CastrTroy]

Your phone company sucks. I'm in Canada, and I get unlimited messaging included in my plan. Even their cheapest plan of $20 per month includes unlimited texting, and unlimited local calls.

Re:my daughter

[ameen.ross]

I find it irritating when people fall for WhatsApp's propaganda that they are a "free" SMS replacement. They're not! You need an internet connection to use it just like any other internet messaging application. Newsflash; you pay a subscription fee for internet connections. And mobile internet connections come with quotas.

Granted, if you already pay for a mobile internet connection, IM will nearly always be cheaper than SMS. But that, too, goes for any IM app.

PS: I'm waiting for Kontalk to become usable before recommending it as the alternative to WhatsApp.

To sum up WhatsApp

[Anonymous Coward]

It's a mobile messenger app similar to the old PC version of ICQ or the BB messenger. People around the world started using alternate messaging apps like this to get around hefty fees some carriers charge for SMS. If your country/region has free or low cost SMS, these alternate messaging plans are not as popular. WhatsApp happened to be one that became more popular than others. I guess Facebook calculated that if they can get all of these people around the world using it under the Facebook umbrella, it will give them more eyes, more users, and more user information.

Re:my daughter

[felipou]

I'm in Brazil, and yes, my phone company sucks. I have to pay extra for unlimited SMS (and this is recent, a few years ago SMS was absurdly expensive).

I don't care how cheap it is (around 4 dollars), everyone I know already has WhatsApp and I already have a data plan, so why should I pay more?

I also used to use iMessage, but everyone I know now uses WhatsApp. Here in Brazil *everyone* uses WhatsApp.

I don't know exactly why, since everyone already had Facebook when WhatsApp got popular here. I guess, since it presented itself like so, people see WhatsApp more like SMS, and not like IM. If I stay online at Facebook Messenger for 10 minutes, 5 random friends will start talking to me. On the other hand, on WhatsApp I mostly receive group messages, nobody talks directly to me using it.