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$19 Billion? Here's What's Up with WhatsApp

The number of WhatsApp users in North America jumped 230% in 2013

Facebook’s acquisition of mobile messaging service WhatsApp has sparked many conversations about the mobile messaging landscape in general. A February 2014 press release from Juniper Research forecast that by 2018, instant messaging (IM) apps’ share of mobile messaging traffic worldwide would be 75%, or 63 trillion messages. But revenues from such apps would total just over $3 billion to claim only 2% of mobile messaging revenues.

While IM apps boast high traffic volumes, Juniper Research said this was due to the fact that users typically send more “chats” with information that may be included in one SMS/MMS message. Other factors such as group conversations and emoticons also fuel traffic. While traffic may continue to rise, generating revenues remains a challenge.

So why spend $19 billion on WhatsApp? Despite these revenue hurdles, mobile messaging apps have seen tremendous growth in user numbers, and WhatsApp’s broader international reach should help Facebook enter new global markets—and the social network may help the chat app expand its reach in North America. More than 200 million people worldwide now use the app regularly, according to a February 2014 blog post by GlobalWebIndex, and this figure jumped 175% last year. While Asia-Pacific had the largest audience by far (101 million), North America was where the real story was. The number of users in the region jumped 230% to 7 million in 2013—an admittedly small number, but one that shows major potential for growth.

Despite the varying audience sizes in each region, engagement with Facebook and WhatsApp appeared to be following a similar trend in the US and worldwide. In January 2014, Strategy Analytics AppOptix found that among US Android users polled who had a Facebook app, 63% engaged with the app each day, compared with 36% engagement for those who used WhatsApp.

Similarly, GlobalWebIndex polling in Q4 2013 found that 69% of mobile device owners worldwide used the Facebook app, and 36% used WhatsApp. As time goes on, many will be watching whether the two apps are able to merge together to become a global mobile social messaging powerhouse.

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