When Facebook bought Instagram for $1B, I remember thinking that seemed like a lot of money. Well, this deal is like Facebook buying 19 Instagrams ... That's lots of lots of money!
So, why does Facebook think WhatsApp is worth $19 Billion dollars?
The answer is surprisingly easy to understand.
When Facebook announced its acquisition of WhatsApp last week, it revealed some interesting statistics about WhatsApp's user base and overall usage. They are eye-popping.
According to Facebook's presentation slides, WhatsApp's 450 million monthly active users send 19 billion messages per day ... and receive 34 billion (the seeming discrepancy is caused by WhatsApp's group chat feature, where one message can be sent to several receivers).
This chart shows how much an average user uses WhatsApp per month.
WhatsApp's growth and usage numbers are absolutely mind-boggling. As noted, it has 450 million monthly users ... but 70 percent of them (310 million) use the service daily.
More impressively, Facebook claimed that the number of messages being sent through the company’s service is “approaching the entire global telecom SMS volume” (according to telecom market researcher Informa, this was about 19.5 billion last year).
And for a 'cherry-on-top', Whatsapp continues to bring in over a million new users each day. That’s the kind of growth that Facebook can’t ignore if it wants to remain a leader in social networking and communication, and the company knows it.
In other words, WhatsApp has both offensive and defensive value to Facebook.
One last thought on the subject ... word on the street is that Whatsapp only had 55 employees. It is a testament to what cloud-scale is making possible.
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