Facebook buys WhatsApp for $19 billion

The balance of power in the mobile messaging space is about to shift in a big way -- Facebook has just announced plans to acquire WhatsApp for the equivalent of $19 billion in cash and stock. The deal will see WhatsApp run semi-independently, much like Instagram. The chat service will maintain its brand and existing offices, but it will take advantage of Facebook's "expertise, resources and scale." It's safe to say that the combined entity will have a lot of clout should the deal close later this year. WhatsApp already has over 450 million active users every month; combine that with Facebook Messenger and competitors like Line suddenly appear tiny by comparison. cuts in....

Facebook recently said on its earnings call a few weeks ago that its November relaunch of Messenger led to a 70 percent increase in usage, with many more messages being sent. But much of that was likely in the United States and Canada where the standalone messaging app war is still to be won.

Internationally, Facebook was late to the Messenger party. It didn’t launch until 2011 after Facebook bought Beluga, and at the time it was centered around group messaging where SMS was especially weak.

WhatsApp launched in 2009 with the right focus on a lean, clean, and fast mobile messaging app. And while the international messaging market is incredibly fragmented, it was able to gain a major presence where Messenger didn’t as you can also see in the chart above.

Unlike PC-based social networking, there is no outstanding market leader in mobile messaging. Still, WhatsApp absolutely dominates in markets outside of the U.S. like Europe and India. 

[Update: WhatsApp was much more popular than Facebook in several large developing markets, according to data from a small survey conducted by Jana Mobile and published byThe Information (paywalled). In India, Brazil, and Mexico, respondees were 12X to 64X more likely to say WhatsApp is their most used messaging app, compared to Facebook. Those are big countries with tons of users that Facebook needs.]

It’s also impossible for Facebook to acquire certain other Asian competitors like WeChat, which is the one hope of Chinese mega-giant Tencent to have a global consumer product. 

So it’s clear that WhatsApp had strategic interest to Facebook, and we know that the two talked from time to time. 

We made the map above using data from Onavo, another Israeli-based company that Facebook acquired for — ahem — competitive intelligence. Because Facebook scooped up Onavo for more than $100 million in October, we don’t have access to active usage data anymore. The only thing outsiders can see are app store rankings, which imply download rates and not current usage.