Facebook Says Whats Up to WhatsApp, Google Gets Shot Down
Wednesday marked a good day for WhatsApp and Facebook (NASDAQ:FB), as Mark Zuckerberg officially closed his $19 billion deal on the popular mobile messaging app. But for Google (NASDAQ:GOOG), the day might not have warranted as much as a celebration, because now reports are highlighting that the Internet giant was also interested in acquiring WhatsApp, in its case for $10 billion, but the company shot it down.
According to Fortune, Google has long been interested in acquiring WhatsApp, but the sum it offered the messaging service was not only exceeded by Facebook, its conditions were also outplayed. Unlike Facebook, Google reportedly didn’t offer WhatsApp CEO Jan Koum a seat on its board of directors, and it looks like Koum took it personally. The chief executive signed his name on the Facebook line and made history Wednesday, shocking consumers for the total sum WhatsApp attracted from Facebook. In 2012, the big Facebook news was its acquisition of Instagram for $1 billion, but that total now looks like pocket change next to Facebook’s latest deal.
So what could possibly convince Zuckerberg to shell out that much cash for an app that many consumers don’t even know about yet? Two words: growth potential. Regardless of whether WhatsApp has made it big in the U.S. yet, the messaging app has enjoyed significant growth in its first four years, surpassing Facebook, Gmail, Twitter (NYSE:TWTR), and Skype in terms of monthly active user accounts. Currently, more than 450 million people are using WhatsApp each month, and 70 percent of those people are active on a daily basis. More than 600 million photos and 200 million voice messages are sent each day, along with more than 100 million video messages. So it looks like Facebook has met its match — and it just bought it. Though the app will remain as a standalone service and will continue to be free to install, now Zuckerberg is ready to focus on the service’s growth for the next couple of years before he worries about monetization.
It’s safe to say that Google missed out on that one, and it isn’t the first time the world’s largest search engine has been outbid by Facebook, but still, Google has had its own success wheeling and dealing, and the Mountain View, Califoria-based company knows how to play the game. What’s interesting about Google’s relationship with WhatsApp, though, is that according to The Information, Google was actually willing to pay WhatsApp to keep it informed about its offers before it signed any deals, but WhatsApp wasn’t on board with that.
The Information reports that it was sometime in 2013 when Google offered to pay WhatsApp money if it agreed to tell Google that it was entering into acquisition talks with another party — and we’re talking millions here — but WhatsApp ended up rejecting that offer, which was another blow to Google. It’s no longer a secret, thus, that Google really didn’t see this Facebook offer coming.
Since the big announcement, Google has remained mum about the deal, unsurprisingly refusing to comment, but we don’t think the company’s executives will brood for too long, because there are still many up-and-coming apps up for grabs, and one of them is Snapchat. The photomessaging company has made headlines in recent months over its refusal to accept any of the jaw-dropping offers coming its way, but Google may now be more interested than ever in getting its hands on the increasingly popular service, and we wouldn’t be surprised if it makes news soon, too.