Friday, February 21, 2014
Associated Press
SAN FRANCISCO
If Facebook hopes to remain the social-networking leader, CEO Mark Zuckerberg knows the company must follow the people. That realization compelled Zuckerberg to pay $19 billion for WhatsApp, a mobile-messaging application that is redefining the concept of texting while its audience of 450 million users expands at an even faster clip than Facebook itself.
The deal sent shock waves through the technology industry because of the staggering price being paid for a 4-year-old service that isn’t as well known in the U.S. as it is overseas where Whats-App has become a hip way to communicate instantaneously.
Although the amount of money involved is difficult to comprehend, the reason Facebook prizes WhatsApp is easier to grasp.
“This is a ‘go big or go home’ moment for Facebook,” said Benedict Evans, a former cellphone analyst who is now a partner with the venture capital firm Andreessen Horowitz.
Just as he did nearly two years ago when Facebook bought photo-sharing service Instagram for $715 million, Zuckerberg is trying to ensure that his company doesn’t get left behind as people move to the next trend.
And WhatsApp is what’s hot now. The Mountain View, Calif., startup already has nearly twice as many users as the better-known short-messaging service, Twitter Inc. What’s more, WhatsApp is adding about 1 million users each day — more than even Facebook.