Rumor: Google negotiating $1 billion acquisition of WhatsApp

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

Whilst the offer commenced 4 or 5 months back, we’ve been informed that WhatsApp is “playing hardball” and jockeying for a increased acquisition cost, which at the moment is “close to” $one billion appropriate now.

We’ve suspected for some time now that a messaging application would be the up coming billion greenback acquisition offer following Facebook’s Instagram purchase-out very last 12 months. 2012 was the year for image-sharing applications, which apple standing generation latest design you know every thing about by now. So, 2013 has been dominating by the messaging app-meets social community industry.

There are rumors that Google Babel will merge Google’s disparate interaction solutions below 1 roof, but the platform nonetheless wants to do one thing to innovate in this space cell messaging has been taken above by more compact applications and Fb has created a main press as nicely. Google has not presented an answer to this competitors. Even Google Product Manager Nikhyl Singhal confessed to GigaOM in June of last yr that “We have done an incredibly bad task of servicing our consumers here.” Messaging is a huge, gaping hole in Google’s cellular method.

Conversation services are the pillar to any connected unit knowing this, if Google would like to be taken critically on cell, it’ll want a standout like WhatsApp to just take below its wing, and it requirements to function fast.

By all regards, the acquisition is a no-brainer. Apps like LINE, WeChat, Nimbuzz, Tango, KakaoTalk, and of training course WhatsApp, are creating a splash on mobile (and as social applications) in document time. LINE has absent from zero to a hundred thirty million consumers in just underneath two a long time. Even new entrant MessageMe has rocketed from zero to 1 million end users in just twelve days.

Google cannot pay for the time to rebrand and rebuild a aggressive messaging application at the chance of getting into the recreation also late â€" or, it wants to be in a position to function off the system WhatsApp has previously proven and use this technological innovation (and sensically, the user foundation) to fill out the purported Babel. 

Also justifying the rumors is the reality that Google has approached WhatsApp before (as has Facebook). Look at it this way: WhatsApp is persistently the number one particular paid out app in a lot more than one hundred nations around the world with an enviable person base measurement unfold through more than 100 nations and 750 cell networks. To give you an thought about WhatsApp’s scale, on New Several years Eve 2012 by yourself WhatsApp saw a document eighteen billion messages processed in a working day.

But more importantly, WhatsApp has a confirmed monetization plan. Its yearly but nominal $.99 subscription fee retains the service ad-free of charge. Driving the scenes nevertheless, WhatsApp also generates income through profitable partnerships with international telecommunications businesses. For occasion WhatsApp’s month to month local prepare in Hong Kong with cell operator three HK fees just $8HK ($1.03 USD) and an global package deal will operate for $48HK ($six.18 USD) for each day. And no matter what Whatsapp is doing is working: The application has even had a immediate hand in declining SMS use about the planet.

WhatsApp has remained mum about its profits, but our supply suggests that WhatsApp could have a ballpark of $a hundred million in yearly revenue â€" we’re operating on corroborating that depth.

Edit: We formerly referred to Google’s unified conversation providers as “Babble,” but new proof has come to light suggesting that the services will be known as “Babel.” The alterations have been reflected previously mentioned.