Mark Zuckerberg’s keynote address will overshadow any product announcements next week, writes Niall Kitson.
When Facebook co-founder and CEO Mark Zuckerberg was confirmed as a speaker at this year’s Mobile World Congress last month the topic of his keynote address was the benefits of ubiquitous connectivity.
After the announcement of webtext service WhatsApp’s acquisition for $16 billion (plus an additional $3 billion in shares locked away for four years) he should change it to ‘how social networks are replacing telcos’.
Ubiquitous connectivity is now a fact of life; the battle between mobile operators isn’t being fought in call and text pricing, it’s all about data and has been for some time.
The rollout of 4G networks across Europe will draw further attention to VoIP and webtext services like Skype, Viber and WhatsApp. With a sympathetic data plan, you need not worry about overstepping your regular tariff at all.
From a business perspective, acquiring WhatsApp makes sense.
It has a strong user base of 400 million (300,000 in Ireland) and a working revenue model based on an annual subscription of 99c with the first year free. That leaves plenty of room to expand through Facebook integration and increased more opportunities to generate revenue, possibly through the introduction a ‘freemium’ option with embedded ads you pay a subscription to remove.
Given that 53% of Facebook’s revenue in the fourth quarter of 2013 came from mobile it will be interesting to see how closely WhatsApp is adjusted to resemble its new parent company, including how message content and contact lists could be mined for marketing purposes.
Zuckerberg is convinced of the benefits of taking on 400 million users of dubious spending power (who probably already have Facebook accounts) but the markets, so far, are not.
Shares in Facebook were down 5% at time of writing to $68.
The level of disruption hasn’t hit mobile networks, yet.
None of Vodafone, Telefonica, Hitchison Whampoa on this side of the Altantic suffered so much as a wobble, although Japanese Web services company Rakuten, which bought WhatsApp competitor Viber for $900 million was down 4.81% on the Nikkei.
Keep calm and carry on.
So what can the average user expect to see in the next few months?
WhatsApp integration with Facebook profiles would be great for keeping people on their profiles longer and managing their IM and SMS conversation in much the same way - also giving advertisers more time to pitch to possible customers.
Otherwise you can expect the exact same process as happened in 2012 when Facebook bought picture-sharing network Instagram: convenient integration only if you want it.
While WhatsApp powers ahead with new owners and a massive valuation, you might want to spare a thought for Google – which had its $1 billion buyout offer refused only last month - and picture messaging service Snapchat, who turned down a $3 billion offer from Facebook.
Maybe fate will bring these two losers together with a less spectacular deal.
In other Mobile World Congress news, Samsung will be revealing the Galaxy S5, HTC will unveil its new flagship phone, Sony will have a new range of tablets and LG will show off its new range of Android 4.4 KitKat handsets.
Niall Kitson is editor of TechCentral.ie