When Facebook acquired WhatsApp last night, most of the initial headlines focused on the value of the deal and overall shock at how big the number actually was.
Examples ranged from “Facebook to buy WhatsApp for $19 billion in deal shocker” (Reuters) to “Stunner: Facebook to buy WhatsApp for $19 billion in cash, stock” (Forbes). But looking beyond the price, the Facebook acquisition of WhatsApp proves that mobile messaging is truly the “new black” for mobile innovation in 2014 and beyond.
As the market seeks to assess the meaning of the price tag in the $19B acquisition, analysts will have conflicting views of the valuation. Initially, most are saying it is not justified by historical norms. Others will say it was a smart move designed to pre-empt an emerging powerhouse, as seen in the explosive growth of WhatsApp. And even others will say it is a means for Facebook to broaden its presence on mobile devices and draw in a younger audience—where it has been plateauing the past few years.
Evolution to mobile communications
However, this initial analysis may gloss over the more fundamental shift that is signaled by this deal. In looking at how consumers are engaging with one another and media, Facebook is making an assessment that our electronic communications are continuing to evolve—now, from voice, e-mail, IM, and yes, even social media like Facebook, to text messaging. And before betting against Facebook (which thus far has never been a good idea), skeptics may want to note that Facebook and Mark Zuckerberg have placed big bets before.
It was only a year ago, in Q2 of 2013, that Zuckerberg redefined his company from a “social media” company to a “mobile company.” And let’s not forget that many thought he paid crazy money for Instagram (compared to yesterday’s deal, it was a bargain-basement $1 billion). But in the year since, the power of mobile has worked, as Facebook stock has moved from sub-$20 a share to over $60. Only time will tell, but it may be that the WhatsApp deal will be seen as a prescient assessment of the power of next-gen text messaging, with features that go beyond what the carriers have offered for over two decades.
Mobile consumer behavior precedes business behavior
At HeyWire, we are seeing compelling evidence of not only the power of texting in consumer communications, but the reality that it’s also driving business today. Text messaging, through its immediacy and responsiveness, is redefining how consumers and now business people engage with each other and with brands. Consumers and professionals alike are choosing text as the preferred means of communication with family, friends, and colleagues. Texting has moved from a demographic trend of the teen set to a completely mainstream activity.
A recent HeyWire Business survey shows that 67 percent of business people ages 21-59 are texting for work today—not just with colleagues, but for conducting sales and services with customers. The opportunity this creates, in terms of a powerful forum for people to communicate more easily—and for companies to conduct business with their customers, not just for mobile marketing—cannot be underestimated.
Text messaging in the business world is growing daily, as users come to realize that text improves efficiency—enabling users to avoid the delay that comes with e-mail and voicemail. Companies like HeyWire are helping customer support centers text-enable their landlines—letting customers text to the same numbers they have called for info and support. Employees are using business texting to reach colleagues and close time-sensitive business from computers and tablets, not just mobile phones. It’s a lever for productivity that lets more business get done in less time.
So while honest debates will rage about the valuation of the WhatsApp deal, the fact remains it is indicative of the broader long-term migration by people of all ages to text messaging.
Let’s credit Mr. Zuckerberg for recognizing a trend early on. It’s unlikely we’ll look back at this acquisition in five years as more “post-bubble folly”—it’s not a fad or fashion. Text has emerged as a fundamental medium of communication powering both consumers and business users.