WhatsApp, Doc?

Big as $16bn is, it's small beans to Facebook.
No, I don’t spend a lot of time on these. Why do you ask?

If diplomacy is the art of saying “nice doggie” until you can find a stick, then Facebook may have found a stick big enough to deliver a final beating to the mobile network operators (MNOs).

SMS text messaging was an unexpected windfall for MNOs back at the dawn of the mobile era. Fitting 160-character text messages into unused network channels, they opened up a new revenue stream with next-to-no investment. It became such a lucrative slice of their business that they got very protective of it.

The problem is that SMS messages are pretty limited. MNO efforts to introduce an alternative in the form of the Multimedia Messaging Service (MMS) didn’t really take off, and the advent of smartphone apps and mobile data left the MMOs in the dust.

WhatsApp is probably the most successful of the text-message replacement apps, with 450 million active users at the most recent count. It’s tied to phone numbers, and it allows users to send voice, video, photos and more, as well as text messages of whatever length they like. As of yesterday, it’s in line to be purchased by Facebook for $16 billion (some reports put the price as $19 billion). That’s at least $35 per customer, however you slice it.

Whether or not WhatsApp is worth the price is beside the point. Facebook thinks it is. Why? Well, there are plenty of reasons, even beyond those 450 million users. WhatsApp is big in developing economies, where SMS costs tend to be high. It’s grown its user base faster than any other company ever and done so while remaining a relatively tiny company. The fact that it’s done so without any marketing spending indicates just how much its users like it.

However, it really is all about those 450 million users and however many it may be able to add in the future. The fact that Google is rumoured to have offered $10 billion for WhatsApp is indicative of the war for communication being waged between those two titans. Facebook has the biggest private social network out there, and WhatsApp marks a land grab among the services seeking to circumvent the MNOs’ control of how we communicate with one another.

This can’t be good news for the MNOs. They’ve been fighting a rearguard action against being turned into mere bandwidth providers ever since Apple launched the iPhone App Store, and with Google and Facebook seeking to dominate how we use the mobile space, that’s not going to get any easier in the future. Here in Ireland, companies like Vodafone, O2 and Meteor are increasingly getting shoved into the background—we get our phones from them and pay for our broadband, but beyond that? There are fewer and fewer spaces for them to make any extra money or offer extra value.

This isn’t necessarily bad for consumers, but it does steal from the MNOs one of the most valuable commodities of the modern world: data. Everything that we do online leaves a digital footprint, and what we do reveals better than anything else what we want now and what we might buy in the future. Theres money in them thar 1s and 0s. Google and Facebook want it and have a lot of it, and with the purchase of WhatsApp, Facebook will have even more, based on both our phone numbers and our contact books.

WhatsApp was founded on being a straightfoward replacement for SMS, free from ads, games or other frippery. That will inevitably change somewhere down the line, and how major the change is will affect at least to some degree how successful WhatsApp’s future will be. WhatsApp’s investors and employees have already won in this acquisition game. Facebook may well win in the future. As for us consumers, we’ll have to wait and see.

A Valentine Aide-Memoire

This one, at least, was easy to do.
The puzzles of the human heart are less puzzling than commonly thought.

There are two main approaches to Valentine’s Day. The mass-market one, adopted with varying degrees of enthusiasm or resignation, is that of getting involved, making an effort and celebrating that one special person. The sophisticated approach, adopted by cynics and singletons, is that it’s nothing more than an exercise in raising sales of flowers and chocolates, and is best avoided by anyone with a genuinely romantic bone in their body.

I don’t wholly subscribe to either viewpoint.

It’s not much fun being single on Valentine’s Day, when the world is reminding you, in red and pastel pink, how wonderful relationships are. However, it’s not always a lot of fun being in a relationship either, facing a dose of societally mandated pressure to “celebrate” your significant other by splashing cash on

However, human beings are crap when it comes to relationships, as much as they’re crap at anything else. We’re forgetful, we fall into bad habits and we take the most important things for granted simply because they’re always there. Getting a kick up the arse, even from an unwelcome direction, isn’t a bad thing if it reminds us that, hey, this is something worth a little celebration.

Only once a year though? (Add in a birthday, an anniversary and Christmas and you have four times a year, which still seems a little lacking.) Rampant commercialism doesn’t seem like the best way to set a mood either. It’s very hard not to be cynical when you see stores clearing away Christmas goods just to replace them with an array of Valentine’s Day products. (My local Tesco has a permanent “seasonal products” aisle, so you always know where to go to be reminded what the next thing you’re supposed to spend money on is.)

Cynicism, then, may be the healthiest response to Valentine’s Day. However, that ought to be cynicism towards the marketing rather than the message buried deep underneath. Responding to a prompt to do something nice, to give the person that means the most to you a little extra thought, doesn’t mean you’re giving into capitalism. After all, the form the resulting action takes ought to reflect both you and the relationship you’re in. However weird it may be.

So, opt out of Valentine’s Day and its avalanche of cards, flowers and chocolates by all means. Or opt in, and personalise it. Either way, it ought not to be just one day a year, and any reminder to be a better person ought to be appreciated.