The war for mobile messaging is on

May 19, 2013 at 12:00a.m.

Los Angeles Times

SAN FRANCISCO

WhatsApp is one of Silicon Valley’s most buzzed-about companies, yet it actively avoids the spotlight, operating out of a small office in Mountain View, Calif., with no sign on the building entrance or on the office door.

Unlike most startups eager for media attention, WhatsApp Inc. says it doesn’t want or need it. Its popular mobile messaging application has spread so quickly by word of mouth that in just four years it has amassed hundreds of millions of users who collectively send as many as 18 billion messages a day.

WhatsApp belongs to a new generation of messaging services that are revolutionizing 20-year-old text messaging technology and escalating the mobile messaging wars.

“In many countries, consumers have decided they prefer these mobile messaging apps,” said Tero Kuittinen, an analyst with mobile diagnostics firm Alekstra.

Now they are taking the U.S. by storm. That’s particularly worrisome to wireless carriers that have already lost billions in revenue from customers shifting from text to so-called instant messages such as Apple Inc.’s iMessage service, which each day delivers 2 billion messages free of charge.

But the growing popularity of these mobile apps is not good news for the Silicon Valley tech giants either. Analysts say people use the apps to connect with their closest friends and relatives, creating a new more intimate social network that could rival Facebook Inc. and Google Inc. for the attention of hundreds of millions of users and, eventually, advertising dollars.

Messages sent using the mobile apps, which are offered by third-party developers and downloaded to smartphones, are not limited to 160 characters the way text messages are. They also enable users to be more creative with scribbled notes, doodles and emoji pictograms that express thoughts and emotions that the typed word sometimes cannot. Some apps are adding games and other distractions to hold people’s attention even longer.

Many of the apps are free or charge a small subscription fee - WhatsApp charges $1 a year.

When Nick Meyer, a 22-year-old graduate student at North Carolina State University, is on his iPhone 4, he’s mostly using an app called Kik to chat with friends, he says. Each day he sends a few hundred messages, yet never messages friends on Facebook unless he’s sitting at his computer.

“Mobile is going to be the main form of communication. In some ways, it already is,” Meyer said.

With the explosion in worldwide sales of smartphones, these apps are already the go-to messaging tool in Europe and Asia, where they have taken a big bite out of texting traffic and profits that text messages generate for wireless carriers. Wireless carriers lost a total of $23 billion in texting revenue as of the end of 2012, research firm Ovum estimates.

Research firm Informa says people are now sending more messages over mobile apps such as WhatsApp than they are text messages - and the trend is accelerating. By the end of this year, traffic from mobile messaging is expected to be more than double that of traditional SMS texts. CTIA, a wireless communications industry group, recently found that Americans sent 2.2 trillion SMS text messages last year, down 5 percent from 2011.

The trillions of messages from around the globe that run through WhatsApp alone each year already surpass the texting volume of all top four U.S. wireless carriers combined, telecommunications consultant Chetan Sharma said.

MessageMe, a free app, launched in March. A week later it had 1 million users. Its most active users send 30,000 messages a day, the San Francisco company said.

“I didn’t know that was physically possible,” MessageMe co-founder Arjun Sethi said.

In mobile, messaging has emerged as the “killer” app, said Ted Livingston, chief executive of Kik Interactive Inc., a Canadian startup that last month announced it had raised an additional $19.5 million in funding. Kik has 50 million users and adds 200,000 users each day, Livingston said.

Popular apps in the U.S. include WhatsApp, Kik and MessageMe. Kakao Inc.’s KakaoTalk and Tencent Holdings Ltd.’s WeChat are hot in Asian markets.