Rumor: Google negotiating $1 billion acquisition of WhatsApp

whatsapp facebook

Update: Whatsapp has spoken to AllThingsD. Whatsapp’s Head of Business Development Neeraj Aroratold has said that Whatsapp “is not holding sales talks with Google” and the company declined to provide additional comment.

Messaging app WhatsApp is in the negotiating phase over prices with Google in what could be Google’s next billion dollar acquisition, according to an inside source.

While the deal started four or five weeks ago, we’ve been told that WhatsApp is “playing hardball” and jockeying for a higher acquisition price, which currently is “close to” $1 billion right now.

We’ve suspected for some time now that a messaging app would be the next billion dollar acquisition deal following Facebook’s Instagram buy-out last year. 2012 was the year for photo-sharing apps, which you know everything about by now. So, 2013 has been dominating by the messaging app-meets social network market.

There are rumors that Google Babel will combine Google’s disparate communication services under one roof, but the platform still needs to do something to innovate in this space; mobile messaging has been taken over by smaller apps and Facebook has made a major push as well. Google hasn’t given an answer to this competition. Even Google Product Manager Nikhyl Singhal confessed to GigaOM in June of last year that “We have done an incredibly poor job of servicing our users here.” Messaging is a huge, gaping hole in Google’s mobile strategy.

Communication services are the pillar to any connected device; knowing this, if Google wants to be taken seriously on mobile, it’ll need a standout like WhatsApp to take under its wing, and it needs to work fast.

By all regards, the acquisition is a no-brainer. Apps like LINE, WeChat, Nimbuzz, Tango, KakaoTalk, and of course WhatsApp, are making a splash on mobile (and as social apps) in record time. LINE has gone from zero to 130 million users in just under two years. Even new entrant MessageMe has rocketed from zero to one million users in just 12 days.

Google can’t afford the time to rebrand and rebuild a competitive messaging app at the risk of entering the game too late – or, it needs to be able to work off the platform WhatsApp has already established and use this technology (and sensically, the user base) to fill out the purported Babel. 

Also justifying the rumors is the fact that Google has approached WhatsApp before (as has Facebook). Look at it this way: WhatsApp is consistently the number one paid app in more than 100 countries with an enviable user base size spread throughout more than 100 countries and 750 mobile networks. To give you an idea about WhatsApp’s scale, on New Years Eve 2012 alone WhatsApp saw a record 18 billion messages processed in a day.

But more importantly, WhatsApp has a proven monetization scheme. Its yearly but nominal $0.99 subscription fee keeps the service ad-free. Behind the scenes however, WhatsApp also generates revenue through profitable partnerships with international telecommunications companies. For instance WhatsApp’s monthly local plan in Hong Kong with mobile operator 3 HK costs just $8HK ($1.03 USD) and an international package will run for $48HK ($6.18 USD) per day. And whatever Whatsapp is doing is working: The app has even had a direct hand in declining SMS usage around the world.

WhatsApp has remained mum about its revenue, but our source says that WhatsApp may have a ballpark of $100 million in yearly revenue – we’re working on corroborating that detail.

Edit: We previously referred to Google’s unified communication services as “Babble,” but new evidence has come to light suggesting that the service will be called “Babel.” The changes have been reflected above.

Wearables

This is how Google will improve the quality of Wear OS apps

Google wants to improve the quality of Wear OS apps, and to that end the company has announced that the review process of Wear OS apps for Google Play is now mandatory. Criteria for Wear OS apps include that they work as expected.
Business

T-Mobile wants to reinvent customer service with a ‘Team of Experts’

To reinvent how it approaches customer care, T-Mobile announced its Team of Experts. Whenever a customer contacts T-Mobile, they're given direct access to the same team members each time without being put on hold or transferred.
Mobile

Google working on quick charging fix for Pixel after Android 9.0 Pie update

Google's Pixel smartphone may be running the latest software, but it still has its fair share of issues. We've rounded up some of the more common Google Pixel problems, along with a few solutions for addressing them.
Social Media

Kids can now initiate a friend request on Messenger Kids by using a password

Facebook's messaging app for the under-13 crowd required parents, not kids, to initiate the process of adding a friend. Now kids can start the process by using a unique passphrase -- a feature that still requires parental approval.
Social Media

Three million people quit Snapchat after the redesign

After a million users signed petitions to get the old Snapchat back, the network's user count is showing the early results of the changes with a three-million-user drop in daily active users.
Social Media

Facebook wants to help you find a mentor with its latest Groups feature

Facebook is designed for connecting to other people -- so why not mentors? Today, Facebook launched a program inside Groups that allows for two users to go through a mentorship program together.
Features

The numbers don’t lie: Facebook is faltering. So what will eventually replace it?

Facebook is faltering, and the data prove it. User growth is slowing, employee outlooks are dipping, and young people are looking elsewhere. But for Facebook to fail, an alternative must arise. Who will it be?
Social Media

Facebook’s less cluttered friend list feeds are no more

Facebook friend feeds created a more curated news feed -- but not anymore. Facebook discontinued the feature, saying it wasn't widely used. The move will help the network focus on improving the news feed, the company says.
Photography

Starting a vlog? Here are the best cameras to buy

Any camera that shoots video can be used to vlog, but a few models stand out from the crowd thanks to superior image quality, ergonomics, and usability.
Photography

For Monaris, it’s a photography career launched on an iPhone and Instagram

On Instagram, she's known just as Monaris. But street photographer Paola Franqui has built a following largely with an iPhone and a smile. We sat down with her to talk photography, style, and Instagram, of course.
Mobile

Marco? Polo! Let's explore the app known as the 'video walkie-talkie'

Marco Polo has been dubbed the "video walkie-talkie," but how does the video messaging app stack up against competitors like Snapchat and Instagram? From unique filters to personalized video messages, we explore the Marco Polo app.
Photography

The Nixplay Iris might just make digital picture frames cool again

The digital picture frame's popularity has fizzled because of time-consuming updates and low quality -- but can a Wi-Fi connected frame change that? The Nixplay Iris is an 8-inch smart digital picture frame that wireless updates photos.
Social Media

Instagram hackers are changing account info into Russian email addresses

Have you logged in to your Instagram lately? A hack circulating this month has Instagram users locked out of their accounts because a hacker changed all the profile data, according to a report.
Social Media

New deal suggests Facebook is looking to add sweet interactive tools for Live

Facebook now owns a company that specializes in creating interactive live video experiences with polls, viewer comments, and more. Vidpresso says the change will help it bring the interactive tools to more users.