Google is the latest name to be linked to an acquisition of mobile messaging phenomenon WhatsApp, with a report from Digital Trends claiming the deal could be valued close to $1 billion.
Talks between the two firms are believed to have started last month, with WhatsApp reported to be holding out for a figure as close as possible to the $1 billion mark. Earlier this year Facebook was also rumoured to be eyeing the over-the-top (OTT) messaging vendor, while Google itself is thought to have approached WhatsApp prior to this most recent speculation.
While the mooted price tag seems high (unconfirmed reports put WhatsApp’s annual revenue at around $100 million), Google would certainly benefit from bolstering its messaging play. By bringing WhatsApp into the fold, Google could potentially unify its disparate messaging services such as Google Voice, Google Hangouts and Google Talk. All this at a time when OTT messaging apps are eating into mobile operators’ own service revenues; analyst firm Ovum believes that operators, by 2016, will have lost $54 billion in SMS revenues due to the growing popularity of smartphone ‘social messaging’ apps.
And Google would be buying into a hugely successful operation. Cross-platform offering WhatsApp is consistently the number one paid app in more than 100 countries with an enviable user base size spread throughout more than 100 countries and 750 mobile networks. According to TechCrunch it has a staggering 100 million daily active users globally. Growth has been great: back in October 2011 WhatsApp announced that it was serving an average 1 billion messages per day. On New Years Eve 2012 alone WhatsApp saw a record 18 billion messages processed in a day.
In addition, WhatsApp has a proven monetisation scheme. WhatsApps eschews advertising revenue, instead offering a simple yearly subscription fee of $1. iPhone users pay that fee upon first downloading the app, though recent rumors have the iOS service moving to a model more reflective of its strategy on other platforms (where users can download and use the app for free for the first year before being presented with the option to pay a $1 per year subscription fee).
Neither company has provided official comment on the speculated deal.