Another day at the office: “Add phone number to help secure your account and more”
You’ll all know what I’m referring to: Facebook bought Whatsapp. For USD. 19 billion. For that amount they could’ve financed half of the 2014 Olympic Games in Sotsji. They also could have bought Instagram 19 times, or they could’ve paid 279.298 interns a years salary. (Imagine 280.000 interns; they can use phone numbers that Facebook collects to call Facebook users and wish them a good morning. Small personal touch in a digital world).
Why Facebook Bought Whatsapp
Let’s look a little closer on Why Facebook bought Whatsapp. And while we’re at it, why they bought Instagram as well. First of all: market penetration.
Big, Bigger, Biggest
Late last year, word came out that Facebook was losing young US based users. Apparently, young people were leaving Facebook and going some place else. In my opinion, Facebook made a smart move to buy Instagram because that medium is popular amongst youngsters. Winning back lost ground.
Buying Whatsapp is similar to this move: buy a big medium that is popular amongst young people (Whatsapp has 450 million users, majority of which are youngsters).
Business wise, it’s a strategic move to not be big, but to be the biggest.
How do you win back 19 Billion dollars on a service that is either free, or only costs one dollar per year? Advertising in Whatsapp? Unlikely, as Facebook announced that they will not do that. Asking for a higher subscription fee? Possible, but not very likely as most users of Whatsapp are youngsters that don’t like to pay much for such a service. So how can Facebook win back 19 Billion? Data mining is an option; collect as much data as you can to target Facebook users with content they appreciate the most. Just imagine Facebook suggesting an online game that you love, right after you’ve shared your Flappy Bird high score on Whatsapp? In marketing terms this is called ‘ultimate user experience’. In common words you could also call it ‘having so much data that privacy itself can possibly not be secured’. I don’t think the ‘and more’ phrase in the title of this blog refers to privacy.
If big loads of data can attribute to anything, it’s certainly the advertising business. Big companies that advertise on Facebook can be offered detailed information about users and their behavior. Which means ad targeting more accurately and in the end less disturbing for users; they will only be targeted with ads that they are interested in, based on collected data. It could be a way to win back the large investment.
This, in fact, can be seen as an opportunity for music industry. More relevant data means targeting your fans directly; it can possibly enhance user experience on Facebook. Imagine that you can make your Spotify playlist visible for the right person, the one that enjoys your music? That way, and ad is not annoying but is adding value.
‘Because we can’
That’s possibly the fourth reason why Facebook bought Whatsapp. Simply because they can; they are worth the 19 billion to do so. On Saturdays I like to go shopping with my family and buy nice stuff, because I can. On a Wednesday in February Mark Zuckerberg went shopping and bought Whatsapp. Because he can.
So add your phone number to secure your account…. And more. And especially focus on ‘and more’ because More you will certainly get. Security, user experience or privacy; future will tell.
Bas Kruijssen, New Media & Marketing Manager Black Hole Recordings
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