Why Buy WhatsApp? The Importance of Instant Messaging for Data Mining

When Facebook spend the annual GDP of a small country on WhatsApp, everybody with the slightest interest in the technological and economic supergiant sat straight up and paid attention. What does WhatsApp have that makes it that valuable? Why did Facebook get it before anybody else did?

To answer these questions, it is important first to consider the platform that comprises WhatsApp. That is, an extremely cheap annual subscription service that provides an instant messaging application not unlike SMS texting, but much more useful.

Where Does the $19 Billion Price Tag Come from?

The most likely and obvious use of WhatsApp data for a company like Facebook is in data mining. It may seem readily apparent that the average person’s conversation with their friends makes a greater amount of data available than the occasional public status announcement. By running this kind of data into an advertising scheme that engages its users in real-time, it is possible to reap major benefits.

The only problem with this train of thought is that, for consumer rights and privacy advocates, it represents a total invasion of privacy. Two digital privacy non-profit advocacy groups have already applied for an investigation to be made by the Federal Trade Commission. Whether this translates into a limiting of power, it remains to be seen.

The other part of WhatsApp’s value is in the users, some 450 million of which exist and are largely made up of a demographic that so far eludes Facebook’s otherwise global reach. The main value of these 450 million individuals and their relationship with WhatsApp is in their activity and engagement with the application.

WhatsApp Has Great Statistics Among Its Users

The daily messaging count for WhatsApp’s 450 million users consists of 70% of its user base. This is much, much higher than any other competing web application. It signifies a level of engagement with the product that a company like Facebook or really any other would love to have. No doubt they are going to piece together the puzzle that led to such high activity statistics.

The other key number here is the amount of time that it took WhatsApp to get those 450 million current users: only five years. That is three times the growth of Facebook in its first five years and more than ten times the growth of a platform like Skype.

This kind of usage data implies that WhatsApp is on the up curve of its growth, and its new owners want to be part of that and spread it towards their other acquisitions. What the application will lead us towards in the future is uncertain, but with instant messaging applications like this continuing to push telecommunications out of the picture, it is clear that the $100 billion per year cellular SMS industry is in for a wild ride, and it is one that cellular giants like Verizon, Orange, and Vodaphone are not going to particularly enjoy the results of. Visit this website for know more.

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