Facebook & Whatsapp: Opposites attract

A band of yoga practitioners in Chennai interact with each other everyday through Whatsapp on a “4 to 5 pm” group. Just about everything; from whether someone is going to miss a session or is baking cookies or going out shopping or just landed a great deal, is shared, acknowledged and commented upon. This is just a slice of the sort of engagement that Whatsapp has been a vehicle of, since its inception. Free. Instantaneous. Seamless. And no fine print. This mobile messaging software puts users first, without an eye on advertising.

Last week, I was in Washington on a US State Department International Visitors Leadership Program (IVLP). Apart from Skype, Whatsapp was such a godsend to keep in touch with my family. Surprisingly, although this app isn’t as popular in the United States, which seems to prefer Tango and probably accounts for a sizeable chunk of its 145 million users, the buzz at government departments and Universities that I visited was about Mark Zuckerberg gobbling up Whatsapp. It was not so much about the app but about the deal and the mega bucks. Strange as it may seem, this was probably the first time many Americans had heard of the app! Facebook’s decision to acquire this 32-engineer company for a whopping $19 billion has led to eyebrows being raised. Those who haven’t used Whatsapp will obviously find the deal hard to fathom.

I seriously wonder if the debate should be over the valuation, which actually works out to about $42 per Whatsapp user or the inherent contradictory nature of the two business models. I suspect it’s the latter. And here’s why. On the valuation front, don’t forget that Whatsapp has witnessed a meteoric rise from 200 million users nine months ago to 450 million today. Industry estimates indicate that it’s adding up to a million users a day. The existing annual $1 pittance after the first year of use of the app may see no change. Zuckerberg has probably got his money’s worth, especially for the long haul. Here’s the catch. Facebook’s ‘basic structure’, to borrow Constitutional jargon, stems from two broad areas – Data Mining and Advertising. Whatsapp has maintained a deliberate distance from both these fronts. The app’s co-founder and CEO Jan Koum recently recalled that he was brought up in Ukraine where everything was “eavesdropped on, recorded or snitched on”. Which is probably why he designed his system to be “as anonymous as possible”, without even the most basic details like your name and gender. Facebook, in sharp contrast, goes through your posts with a fine tooth comb, analyses them for a pure business purpose. Will Zuckerberg’s vision – or promise, to keep the Whatsapp service “exactly the same”, tie in with ground realities? Can the twain meet? Can Facebook change its spots? That’s going to be interesting. Aside of the manner in which it plans to make the new big ticket acquisition make business sense.

On a lighter note, back home, the more ‘Whatsapp informed’ social media hasn’t missed the fact that its co-founder Brian Acton had applied for jobs at Facebook and Twitter four years ago but had been rejected! It reminds me of the story of a young cartoonist who also kept getting rejection slips from newspapers. The boy approached his priest who offered him paper, pencils and a rat infested dilapidated shed to practise drawing. That’s how Mickey Mouse came about! Like Walt Disney, like Brian Acton.