When Facebook spent $19bn (£13bn) buying
WhatsApp two years ago, the price tag raised more than a few eyebrows.
The smartphone messaging service was wildly popular, with some 450m
users around the world, but the mathematics of the deal were hard to
stack up at the time.
Users paid 99
cents a year for the app, which allowed them to send text messages,
photos and videos over the internet, although around 300m had downloaded
it before a subscription fee was introduced. So to get to $2bn in
revenue, the app would need 2.3bn users – a third of the world’s
population.
Even assuming an enormous
profit margin, the purchase still seemed a stretch to make sense of,
regardless of Mark Zuckerberg’s real reasons for buying it (WhatsApp
was, and is, a major competitor to Facebook’s core product -
communicating online).
Since the
deal, WhatsApp has grown tremendously. It now has almost a billion users
and shows no sign of slowing down. At its current rate it will have 2bn
at the end of the decade, while the number of WhatsApp messages sent
around the world outnumbers texts by around two to one.
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