Facebook…what’s next for Whatsapp

Posted On: September 4, 2015 No Comments

So now that Facebook has shelled out US$19bn to purchase the instant messaging app Whatsapp, many will be wondering what this will mean for users. It’s a lot of money to invest, which means, they clearly think it is worth this much and of course have a strategy in mind to maximise a return on this investment.

So what does this mean for users?

Well its all about the value of data. Buy purchasing Whatsapp (a system which operates on telephone numbers), Facebook have essentially purchased a list of millions of telephone numbers and it is this data that is of value to them.

Many users of social networking sites like Facebook and WhatsApp are not necessarily familiar with the licensing terms and conditions under which they use these applications. For example, Whatsapp’s terms and conditions allow for the terms and conditions to be changed at any time without notification to users, whilst Facebook, which has a broad copyright license on user’s content, shares users’ data with many other services. Consequently, this means that by buying Whatsapp, which is said to be used by some 450 million people each month, Facebook has created the potential for even more personal information to become part of its database.

When it comes to online marketing, there are essentially only two ways to make money. From advertisers or from users. Whatsapp charges a small fee of around 1$ per user per year. Of course, the opportunity to increase this charge does exist, but it is not likely that this would happen because although WhatsApp is the most high-profile alternative text messaging app in the UK, it is not the only contender in the field and price sensitive users could be pushed away, particular teens and overseas users. Whatsapp have also been clear that it would not push advertising on users. So what is Facebook likely to have in mind in order to recoup on their investment?

According to Mark Zuckerberg, there is no immediate strategy to monetize in mind, beyond the fact that “there are many clear ways that we can monetise” he says during a conference with Wall Street analysts, last week.

Thinking ahead

The Facebook strategy is, without doubt, not a short term plan, and moving forwards, it is very likely we will see this additional data source will be used by Facebook to push targeted ads on it’s Facebook site for example, based on the conversations we have on Whatsapp. This may leave some feeling a little perturbed or concerned with respect to privacy issues, but targeted ads in this regard is nothing new. Our online data is already being used in this way for advertising and marketing purposes, via a range of data sources from online searches through to data held on social networking sites.

As technologies develops and advances, becoming more sophisticated, new ways to monetise data evolve. It is clear that Facebook is seeking to ensure that it is simply well placed for this by laying the foundations of a future as the goliath of information databases.

Posted In: Blog , Social Media , Tech Talk

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