You know that a mobile phone application is really popular when your own parents start to use it.
Five years ago when the WhatsApp mobile phone messenger came into being, my brothers and I tried to convince our mother to download it, in order to make it easier for us to share videos and photos with her. We even tried to sell her on the idea that she could connect with her extended family and old high school friends. But it was pointless. She refused completely and argued that it was a waste of time and probably just one of those fads.
Three years later my mother hopped on the WhatsApp wagon. Not only did she reconnect with childhood friends, but she also became a heavier user than me and my siblings. She knows about what is going in the community before her “hipster” kids.
Last month a financial expert colleague of mine, like many other businessmen, predicted that WhatsApp would be the biggest social media application out there. He said that businesses should consider it to promote their corporate news and products, and that this one-on-one interaction would not be seen as personal space invasion by end users but a friendly approach by businesses to touch base with each and every one of their clients.
Frankly, I did not think that WhatsApp could have such an effect. I always thought that Instagram, the photo-sharing social media application, is the most popular out there and is what most small businesses in the UAE use to promote their products and services.
But I was not looking as far ahead as I should have, and I realised that when I found out that Facebook bought WhatsApp for US$19 billion last week. The deal is the largest acquisition of a venture-backed company in history.
With that same amount of money or slightly less, Facebook could have purchased Nike, Visa or Amazon. Instead, it chose to purchase a tiny start-up that so far has accumulated just $60 million in funding, mostly from Sequoia Capital.
Some would argue that $19bn is a lot of good money wasted on a mobile application. But when you come to think about it, Facebook is not only purchasing a mobile application but buying users and global market penetration.
It is also buying a different business model. After the first year of free usage WhatsApp charges each subscriber $0.99, but does not annoy them with banner advertisements that appear on Facebook pages or sponsored tweets, as in the case of Twitter. The application is also built to be a free alternative to mobile SMS text messages. I barely texted anyone after downloading WhatsApp a few years back, and many small business owners in the UAE use it to communicate with their customers, whether to place or follow up on their orders.
WhatsApp will also allow Facebook to dip into other markets. While Facebook may be popular in the West, it is not as much in other parts of the world. In the Middle East and South America, WhatsApp is more popular than Facebook’s proprietary messenger app. Four years ago I used to connect with my friends through Facebook. But now when I do log into my Facebook account page, most of my friends from the Middle East are non-active users, and those who have stayed are active only because they have business pages to maintain.
The likes of Instagram and Whats- App are more popular because they were designed be used mainly on mobile phones. Although Facebook has a mobile app I do not think it is as practical, or maybe it just started too late when people got tuned in to other applications. With more and more users downloading Instagram and WhatsApp, it is obvious that global users are attracted to mobile- based applications. Facebook has realised this and wants a share of the cake.
Bottom line: if businesses do not look at and realise the potential of other alternatives, they could be digging their own graves. A chunk of money spent to survive and maintain one’s position may be the best deal out there.
Manar Al Hinai is an award-winning writer and fashion designer based in Abu Dhabi. Follow her on Twitter: @manar_alhinai
