Facebook's purchase of WhatsApp
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WhatsApp is an excellent facility, which took advantage of the surging market for smartphones -- basically adding mobility to the desktop instant messenger systems that had been available for years.
Facebook is more likely to boost usage of WhatsApp rather than vice-versa.
In 2011, Microsoft paid $8.5bn for Skype - - 32 times operating profit -- and last year with a claimed 300m users, it was estimated that it accounted for one-third of world telephone traffic. Impressive? In 2010, it was reported that 6% of users pay.
What value is Skye to Microsoft now or Google Voice to Google?
The focus on user growth is reminiscent of the 'land grab' hype of the dot-com bubble but why should Twitter be expected to have the same usage growth rate as Facebook - - apart from ridiculous market valuations -- as they mainly operate in different online market segments?
The critical issue for the big name online services is ARPU (average revenue per user) per annum.
Facebook's average revenue per user (ARPU) worldwide accelerated to +39% at $2.14 in the fourth quarter of 2013, and ARPU in the U.S. was up 48% at $6.03.
The key challenge for Facebook is that Google with a similar user base of over a billion, can get $30 per user per annum from search advertising.
In Asia, Facebook's ARPU was $0.95 in Q4.
I was in China last week, where the online sector is doing very well.
Twitter and Facebook are blocked while Google's search is available from Hong Kong but it's a hassle to use as it's not clear what sites are blocked before clicking.
Nomura of Japan estimates that China's WeChat’s average revenue per user is $7, compared to WhatsApp’s average revenue of $1.
Late last week Japanese online retailer Rakuten announced a deal to buy Viber for $900m for 105m users.
Chinese online services are the only ones that can rival the American online leaders - - while the latter try to avoid paying corporate taxes in most of their overseas markets.
So in Asia, the most populous region, there are not easy pickings for the US giants.