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Tim Green: Why WhatsApp is like Ben & Jerry's

Tim Green: Why WhatsApp is like Ben & Jerry's
Tim Green

by

Industry / February 20th 2014 at 1:45PM

WhatsApp is cool. Facebook is not. Facebook bought WhatsApp. Is WhatsApp now uncool? And does it matter?

When I heard late last night that Facebook had bought WhatsApp, I immediately thought of Ben & Jerry's.

My mind is never that far from Ben & Jerry's (whose is?). But as I drifted in a trance to the freezer, I realised I was having a corporate insight rather than a sudden desire to eat chocolate fish.

In the mobile space, WhatsApp occupies a similar space to Ben & Jerry's. It's small, committed to its product above all else, it delivers something fantastic and is beloved by its customers.

And now it's owned by a giant mega-corp.

Ben & Jerry's sold to Unilever in April 2000, just as A&M went to PolyGram in 1987 and Green & Black's sold to Cadbury in 2005.

Selling up or selling out? Either way, this stuff happens all the time.

But it's rarer in digital, where products can be cool, but companies less so.

WhatsApp is a classic example of being cool because of what you do, rather than what you say.

Famously, the firm hated ads, and never stored a single message on its servers. It wanted its engineers to stay focused on building a lovely and reliable messaging service, not moving eyeballs towards banners.

As a result, one engineer currently serves about 14 million active users and the service reports 99.9 per cent uptime.

Also, WhatsApp never spent one penny on ads, PR or marketing. The firm even stuck its ethos on the wall…

Touchingly, these principles appear to have emerged from the life experience of founder Jan Koum, who emigrated penniless to the US from the Ukraine where his family was routinely spied upon.

WhatsApps' refreshingly contrarian approach won it 450m users, most of whom appear happy to pay 99c a year.

Now, it's in the bosom of the company that just loves to mine your data and hack your eyeballs. You could say this is an approach that has succeeded wildly for Facebook, although I'd argue it's also made it very uncool and a bit creepy.

Facebook is really the anti-WhatsApp.

Obviously Zuckerberg has promised not to mess with his new acquisition. I'm sure he's sincere. I don't expect to see ads on there and the privacy policy will probably remain.

So the question is: will WhatsApp users care that their plucky corner shop is now part of Tesco? Will they resign in protest?

Probably not. Instagram seems to be doing fine. And maybe the whole indie thing is nice but not make-or-break to younger users and the digital realm.

So that leaves one question unanswered. If there are to be no ads and just a monthly fee, how is WhatsApp worth $19m?

Let's assume, generously, that it grows to 1bn users and they all pay a dollar a year. That's still 19 years to earn its price tag.

Facebook could raise the annual fee. But it's more likely that Zuckerberg is looking across to the East where firms like WeChat are turning messaging apps into the start points for discovery and commerce.

Today, WeChat users in China can use a taxi booking feature in the ‘Me’ section of the app. Here, they can link to a third party cab service and book a ride through the card they have already registered with WeChat.

21m fares are booked this way a month.

The process puts messaging apps right at the heart of a new way of finding and paying for mobile services, effectively grabbing a slice of the whole app store ecosystem.

Giant firms like Uber, AirBnB and Hailo could find that they need to be on such channels as much as they do on iTunes or Google Play.

That's huge. And it doesn't (necessarily) involve ads or data mining.