![]() Koum said he wanted WhatsApp to improve “unattractive” aspects of the app, like message delivery, its reliability or its battery usage, rather than flashy new enhancements. In a conference call on Wednesday, Zuckerberg and Koum said they would focus on gaining users rather than monetization. ![]() It also recently launched LINE Mall, an e-commerce bazaar. In Asia for instance, Naver Corp’s LINE, a Japanese messenger rumoured to be preparing for an initial public offering, posted $338 million in revenue last year and now makes roughly 60 percent of its revenue from games on its platform. In Asia, WhatsApp posts mixed message for Facebook “They’re dogmatic when the landscape is changing,” said Eric Setton, the founder of Tango, a rival messaging app that offers games and the ability to share songs through Spotify, the music-streaming service. WhatsApp’s moneymaking potential is clouded by the fact that CEO Jan Koum and Zuckerberg have both ruled out advertising as a revenue source, while Koum has prioritized refining basic messaging even as other rivals have branched out. “You can’t just say, ‘oh, it’s a great strategic addition, done!’” ![]() ![]() “You can justify all kinds of numbers if you wanted to, but to get there you ignore away plausible risks,” said Brian Wieser, an analyst at Pivotal Research. Supposing users hit 1 billion by 2016 as some industry experts have suggested, and every one of those pays the $1 annual fee - highly unlikely - it would still clock in at 34 times 2016 revenue, 21 percent costlier than Facebook’s roughly 28 times expected 2016 sales. WhatsApp makes just $20 million a year in revenue, according to Forbes. “It’s going take a while to build up the value from that acquisition, to say the least,” said Jonathan Teo, an investor in picture-messaging phenomenon Snapchat, a WhatsApp rival.Įven assuming ideal conditions, it still outpaces Facebook’s own valuation by a hefty margin. Wall Street cheered the deal on Thursday, but for many Silicon Valley insiders the price tag proved difficult to swallow, especially if WhatsApp’s business model and product roadmap doesn’t evolve under Facebook’s stewardship. Zuckerberg’s bet may ultimately prove to be a strategic masterstroke: shutting rival Google Inc out of an upstart phenomenon with a unique “mobile graph” and gaining swathes of users - and their data - in emerging markets. WhatsApp, which has 450 million users, has stuck to basic messaging, but also a simple business model of charging users an annual subscription fee of just $1. REUTERS/David W Cernyīut this week, Facebook CEO Mark Zuckerberg spent a staggering $19 billion to buy WhatsApp, the contender with perhaps the simplest functionality and negligible revenue. A woman holds a tablet displaying WhatsApp's logo in front of the screen with the Facebook logo in this photo illustration taken in Prague February 20, 2014. ![]()
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