Monday, February 24, 2014 11:56:55 AM
FB CEO Mark Zuckerberg discussed his goals for the recent acquisition during a press conference following the deal last week. Toward the top of the list was continued growth in user adoption and engagement - WhatsApp had 450 users last week and is already up to 465 million, but Zuckerberg and Koum have a shared target of eclipsing 1 billion. Monetization of the app - and justification of the big-ticket purchase - were called into question last week after news broke of the deal. Users pay $1/year after one year of using the service and critics argued the revenue generation was not enough to sustain such a high valuation. The news that WhatsApp will enter the voice communication marketplace is not only disruptive to the industry, but also offers a completely new vertical for revenue generation going forward.
In a previous article about the deal and the positive implications for FB, I cited a study from Ovum, a London-based consulting firm, which noted the mobile SMS industry generated $120 billion in revenue in 2013, down from $145 in 2012 as a direct result of broadband-powered mobile messaging apps. These apps, however, have not yet monetized the difference in revenue generation, and that divergence speaks to potential revenue generation going forward. Similarly, with WhatsApp's announcement today that they'll focus efforts on user adoption of voice call technology, the voice-over-IP concept was just taken to a new level. In a report from The Register, a UK tech magazine, it was cited that by Ovum that: "In 2016, non-voice revenues will no longer be a supplement to voice revenues. Instead, they will begin to replace them." The use of data is growing substantially while voice plans have faltered. This news out of WhatsApp coupled with any potential integration into the actual FB platform for voice connectivity is significant. It points to a future with no need for voice or SMS plans. In the same study done by Ovum it is noted that the current voice market generates $645 billion in annual revenue. 63% of the world's people are mobile phone users - that's 4.4 billion people, and they contribute to voice and SMS plans currently yielding $765 billion in annual revenue, or $174/mobile user per year. If WhatsApp - and the host of other mobile communication applications - is successful in transitioning users to sole reliance on data communication (ultimately, this is the goal), and predictions are correct that global smartphone users will grow to 1.75 billion by 2016, then their target addressable market becomes $305 billion in annual revenue.
The news today from WhatsApp has been relatively quiet thus far, but it might be the most significant product development the company has ever announced.
Recent META News
- Nike Stock Drops 14% in Pre-Market; Nokia Acquires Infinera for $2.3 Billion, and More News • IH Market News • 06/28/2024 10:50:25 AM
- Dow Dips, Nasdaq Gains, Oil Prices Rise • IH Market News • 06/26/2024 11:00:03 AM
- SolarEdge Stock Falls 13%, Wegovy Approved in China, Grail Nasdaq Debut, Apple Rejects Meta Chatbot • IH Market News • 06/25/2024 10:36:11 AM
- Bitcoin Drops to $60,000, Mt. Gox to Reimburse Creditors in July, Riot Platforms Board Restructures • IH Market News • 06/24/2024 07:09:18 PM
- UPS Divests Coyote Logistics in $1.025 Billion Deal with RXO, Under Armour Agrees to $434 million Settlement, and More News • IH Market News • 06/24/2024 11:00:20 AM
- Trump Media Resells Stocks and Warrants; KB Home Exceeds Q2 Expectations, and More News • IH Market News • 06/20/2024 10:55:11 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/18/2024 08:42:26 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/18/2024 08:03:05 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/17/2024 10:15:11 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/17/2024 10:13:54 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/17/2024 10:12:21 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/17/2024 09:05:21 PM
- Goldman Sachs Raises S&P 500 Forecast for 2024; Disney Secures Deadpool & Wolverine in Chinese Cinemas, and More • IH Market News • 06/17/2024 10:49:12 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/14/2024 08:50:56 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/13/2024 10:33:20 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/13/2024 08:56:04 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/13/2024 08:40:23 PM
- Tesla Surges 5% in Pre-Market; Virgin Galactic Drops 9% Following Reverse Stock Split, and More News • IH Market News • 06/13/2024 11:24:25 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/13/2024 01:49:15 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/13/2024 01:47:48 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/13/2024 01:46:31 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/12/2024 09:00:03 PM
- Paramount Ends Skydance Talks, Oracle Shares Surge 8.7% on New Partnerships, and More News • IH Market News • 06/12/2024 11:19:10 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/11/2024 08:55:02 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/11/2024 08:26:51 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM
VAYK Exited Caribbean Investments for $320,000 Profit • VAYK • Jun 27, 2024 9:00 AM
North Bay Resources Announces Successful Flotation Cell Test at Bishop Gold Mill, Inyo County, California • NBRI • Jun 27, 2024 9:00 AM
Branded Legacy, Inc. and Hemp Emu Announce Strategic Partnership to Enhance CBD Product Manufacturing • BLEG • Jun 27, 2024 8:30 AM
POET Wins "Best Optical AI Solution" in 2024 AI Breakthrough Awards Program • POET • Jun 26, 2024 10:09 AM
HealthLynked Promotes Bill Crupi to Chief Operating Officer • HLYK • Jun 26, 2024 8:00 AM