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What is WhatsApp?
RICHARD WEINER
Technology for Lawyers
Published: March 28, 2014
By now, most people know that Facebook has purchased a company called WhatsApp for $19 billion (and some people know that Sequoia Capital, the sole VC in the mix, pulled in over $6 billion on the deal).
So WhatsApp? It’s an example of an instant messaging technology over a smartphone that many experts predict will replace the SMS texting that most of us use, that’s what it is.
SMS (small messaging service) texting is limited to text and to 140 characters per window. That’s also the built-in limitation to Twitter.
Applications like WhatsApp, called mobile-to-mobile instant messaging (MIM), can involve messaging with text, photos, video, music, and any other media available in the Internet. MIM is poised to be far and away, the “next big thing.”
International consultancy company Deloitte recently predicted that 2014 would see MIM carry over twice the volume of SMS worldwide: 50 billion MIMs versus 21 billion SMSs per day. In many countries, MIM has overtaken SMS. In some, like the U.K., SMS has shown a decline, while MIM is steadily increasing. That trend started in the Netherlands and Spain, where SMS has been declining for the past two years. The rest of Europe is not far behind.
One reason cited for this trend is the fact that SMS is far more expensive in Europe than it is over here. Another is advancements in technology, particularly the next generation of 4G connectivity, which make the large amounts of data needed to MIM faster and easier.
The trend is permanent; the handwriting for SMS is on the wall. A telecom spokesperson for Deloitte said, point blank, that, “we have reached the tipping point on SMS.”
For its part, Facebook thinks that $19 billion is well spent. In its SEC filings, the social media giant claimed that WhatsApp is now downloaded a million times a day, that it currently has over 450 million monthly users, and that over 70 percent of those users are on the app every day.
Facebook also claimed in that SEC filing that the messaging volume of WhatsApp was "approaching the entire global telecom SMS volume."