WhatsApp. Inc

by Jason S
Whatsapp Messenger is a instant messaging service for smartphones. It has a monthly subscription fee of one dollar per year, with the first year being free. Tt allows people to send texts, images, video, and audio messages as well as their locations using integrated mapping features. This software is available on the Google Android, BlackBerry OS, Apple IOS, Nokia Series, Symbian, Microsoft Windows Phone, and Blackberry 10.

It was founded in 2009 by Americans Brian Action and Jan Koum, who are also CEO and former employees of Yahoo!. They also applied for Facebook and was not hired. The company has a mere 55 people working. They had grown from one billion messages daily in 2011, two billion in early 2012, 10 billion in late 2012, and a record of 27 billion in the middle of 2013. To put it in perspective, 5 million messages have been sent in the time it took me to finish this sentence.
In late december of last year, they have more than 400 million active users each month in a span of 5 years, more than any company in history.

How it all began?
In january of 2009, less than a year after the release of the first iphone, Jan Koum and Alex Fisherman came to discuss the idea of a new app, where it was named Whatsapp because it sounded like “What’s up”.  They were not sucessful initually because it would keep crashing or getting stuck. In june of 2009, Apple launched push notifications, which allowed developers to ping users, and therefore people will be notified even when they were not using the app. Acton convinced 5 ex-Yahoo friends to invest $250,000 in funding, where they were granted co-founder status. The app was switched from a free to a paid service to avoid growing too fast, because the cost would have been higher mainly due to verification texts.
In early 2011, the app was in the top 20 of all apps in the US apple store.

How it works & relevance
Whatsapp uses a version of XMPP ( extensible messaging and presence Protocal) as well as LITEsql for their database. After installation, it creates a user account using the phone number as the username (8158158151@s.whatsapp.net). It then compares the phone numbers from your device to auto add contacts to user’s contact list. The video and audio work by sending it to a HTTP server then sending a link to the content along with its Base64 (307) Thumbnail

Security and Privacy
Because the app uses information from your contacts, it would also store in its database, the information of people who are not using the app at all. the info is stored in hashed form (code) but it is sufficient to identify the contact
In may 2011, a security hole was reported which left unencrypted communications and data was received in plaintext (messages could be read easily if packet traces were available)
To counter this, they implemented an IP address check on current logged-in sessions.

Facebook’s Aquisition
A little over a week ago, facebook Inc. bought out WhatsApp for $19 billion, (4 billion cash, 12 billion in fb shares, and 3 billion in restrictied stock units(granted to whatsapp’s founders and employees over 4 years). It is the largest purchase of a company back by venture capitalists. just a few months ago, facebook offered to buy snapchat for $3 billion cash, less than 1/6th of the purchase for whatsapp, and bought instagram for 1 billion.

Why purchase?
1. Facebook needs to change to follow new trends or it can be come tomorrow’s myspace, 70% of whatsapp use it daily
2. Whatsapp is made for mobile use, rather than facebook messenger. it will also be segregated from facebook, but could implement all of facebook’s tools to grow.
3. Vision for the future, HTML 5. “The idea is the develop a group of basic internet services that would be free of charge to use…a 911 for the internet”
4. competition for facebook

SMS VS WHATSAPP
sms – allows 160 chartacter text messages to be sent to and from any GSM handset, built into the GSM wireless standard
Whatsapp allows international texting, places with little to no signal is bad for sms
it’s good for people who changes numbers often, don’t have unlimited texting, and no fees

The whatsapp Database was made by Francesco Picasso ( not to be confused with the painter), who wrote a tool with SQlite Database files in HTLM form. By early 2018, it is predicted that IM, instant messaging, would replace SMS as the form of texting, as it is already catching up. And since facebook spent about 1/5th of its whole net worth on whatsapp, it seems confident that many users will catch on to the trend and make up for its $19 billion dollar aquisition in the future.

 

Citations

Church, K.,  Oliverira, R. (2013).  What’s up with WhatsApp? Comparing Mobile Instant

Messaging Behaviors with Traditional SMS.  Munich, Germany: COLLABORATION AND COMMUNICATION

 

Reynolds , D., & Chapple, I. (2014, 02 25). Facebook’s mark zuckerberg: Whatsapp ‘worth more than $19 billion’. Retrieved from http://edition.cnn.com/2014/02/24/business/facebooks-mark-zuckerberg-woos-the-mobile-tech-crowd/

Scott, M. (2014, 02 24). Zuckerberg says whatsapp deal was a bargain. Retrieved from http://bits.blogs.nytimes.com/2014/02/24/zuckerberg-says-whatsapp-deal-was-a-bargain/?_php=true&_type=blogs&_r=0

13 thoughts on “WhatsApp. Inc

  • March 1, 2014 at 6:28 pm
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    After reading your blog, I did further investigating to gain more knowledge as to why Facebook would pay 19 billion dollars for such a simple app. Turns out Facebook CEO Mark Zuckerberg spent so much was due to the fact WhatsApp is on a path to connecting more than 1 billion people. There are very few services that can reach that many and they are all incredibly valuable. Facebook currently has about 1.23 billion users and Zuckerberg says it has a goal to connect another billion people by 2020. Overall I enjoyed your presentation and learned what apps to look out for in the near future.

    • March 6, 2014 at 1:32 pm
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      In addition to attracting new users, Facebook also has to stay relevant to its existing users. Currently there are countless social media sites (i.e. reddit, pinterest, tumblr, stumbleupon), which offer their users several different ways for users to interact with one another. Acquisitions like WhatsApp allow Facebook to expand its service to a wider audience and potentially improve Facebook’s current features like its instant messaging.

  • March 4, 2014 at 11:45 pm
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    I think this is pretty cool because since today’s youth is glued to their mobile devices and since the idea of calling people is dying out, being able to provide a service cheaper than an unlimited texting option for the phone contract will catch a lot of peoples eyes. Good Job.

  • March 6, 2014 at 4:09 pm
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    Wow 19 billion dollars. Facebook must have really felt threatened by it to shell out that kind of money. i found it quite ironic that people who were rejected from facebook developed it and sold it to them to become so ridiculously rich from it. I dont personally use the whatsapp but after reading the article it might be smart that i do. The features on it seem useful and the price for it is basically nothing.

  • March 17, 2014 at 2:40 pm
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    We live in a very connected world, and WhatsApp is an application that does this in a fashion that is cheaper and easily accessible to many. This is how the application created its user base and was able to be bought out for so much. It’s amazing how such a simple application that does what it’s predecessors did in a slightly better way could generate so much money.

  • March 17, 2014 at 8:48 pm
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    it was a great blog, WhatsApp is getting big. many WhatsApp user like this app because it is free and come unlimited text. i was surprise Facebook spending that much money to purchase WhatsApp. if this app getting much bigger we will benefit from the price cut from T-mobile and AT&T from text plan.

  • March 18, 2014 at 6:35 pm
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    I have download WhatsApp and I think it’s pretty neat on how you can use the app. I don’t have that many people on the app to see the full extent but I can see why Facebook would purchase this app. I hope one day I can create an app of great uniqueness and usability to make a huge profit gain from it.

  • March 19, 2014 at 1:05 am
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    I have never tried WhatsAPP but it must be very good if Facebook purchased the app for 19 billion dollars. WhatsApp is providing a service that is cheaper than any other company can offer. This is great way for people to still interact on their mobile phones and not pay a premium.

  • March 19, 2014 at 3:07 am
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    I had never heard of WhatsApp before this presentation so it was kind of startling that it was purchased for so much money. I had no idea that this app was so popular and had so much potential. I’m glad you did your presentation on this, it will be interesting to see the growth of this app and how Facebook utilizes it.

  • March 19, 2014 at 3:34 pm
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    Many people, especially in America, were very hostile to the purchase of Whatsapp from Facebook. Many people were saying the cost was too high and the money could have been spent on other things such as world hunger. This may be true but it is not a senseful investment for Facebook. However the purchase of Whatsapp does make sense to me. Whatsapp has the largest marketshare for an instant messaging service and Facebook sees the potential for this. If Facebook has control of Whatsapp, they have control of almost a billion people. And in the world of technology, marketshare is probably one of the most important assets a company can have.

  • March 19, 2014 at 6:14 pm
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    It’s a very relevant blog considering it’s been in the news a lot and there seems to be quite a bit of information how it works. It’s interesting to know in detail the history and chronology of the creation of whatsApp.

  • March 19, 2014 at 6:59 pm
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    I hadn’t heard of WhatsApp until Facebook decided to buy it for $19 billion. Having used the mobile version of the Facebook messenger, I can say I don’t really like it very much, so this sounds like a pretty good investment, especially since the idea of having an unlimited messaging system that I retain even when I get a new phone number sounds really appealing. However, if what you’re saying is correct and Facebook plans to keep the app separate, then I’m not really sure how it plans to use the app to further itself and I’m curious to see what it decides to do with it.

  • March 19, 2014 at 10:28 pm
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    I have not heard about WhatsApp until your presentation and got me really curious on to what all the hype was about. Facebook buying this company for so much money was intriguing by itself but, finding out how simple the idea was is encouraging to see how something so simple and be used so much.

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