Why WhatsApp is (maybe) worth $19B – in 3 words
Industry
People might be amazed again by the price but messaging apps are the flavor of the day. Snapchat, a messaging service that’s never generated a dime already spurned a $3 Billion+ Facebook offer. Somethings is happening here But you don’t know what it is, Do you, Mister Jones?
Maybe we do. Back in 1994 I was part of creating the first Web-based e-commerce site, MarketplaceMCI. One of what we called the 5 Cs of the complete online experience:
- Content: Information – text, pictures, sound, video, the stuff people consume via attention
- Context: Services to add relevance (in fact, at a macro level, context can be content – think the TV Guide grid – but that’s another post)
- Community: Persona-based groups organized around common interests
- Commerce: Capabilities to enable commercial transactions
- Communication: Enabling site-to-user or two-way communications
Content drove the eyeball vanity metrics of the day, guides and early search engines delivered context, community was (and still is) created by tens of thousands and the millions of bulletin boards and ultimately Facebook, e-commerce became part of the fabric of society, and communication became a protracted war between VoIP, email, chat, and eventually current generation multimedia over IP apps like Whatsapp. Twitter has a foot in each category. And they’re all nits behind the undisputed leaders of communication: e-mail and POTS (plain old telephone service).
Some years later, a group of visionaries (including Christopher Locke who worked on our Marketplace team) wrote
“The Cluetrain Manifesto: The end of business as usual.” If you haven’t read it, you’ll probably find it eerie – just about everything the Internet has changed and become is described in this book. Content marketing, portals, message boards, blogging, (although it was never called that), e-commerce, “social media”, etc. All in there – albeit with more ethos and less commercialism, but that’s probably a function of society, not technology.
20 years later, lets look at the status of the 5 Cs:
- Content – the entire fabric of the web, having completely disrupted the businesses of publication, production and distribution of all media.
- Context – ruled by Google, with distant runner ups still massively valuable entities (Yahoo, MSN, Bing, etc.)
- Commerce – ruled by Amazon and E-Bay, with e-commerce having completely altered every facet of traditional business
- Community – quite fragmented (as you’d expect from varied communities), but with Facebook (at least for now) the 800 pound gorilla
- Communications – ruled by nobody (depsite the best effort of Verizon and AT&T), and fragmented in every way: technologically, with disparate media channels, and a competitive landscape divided between upstarts like WhatsApp and monopolies still trying every legislative, litigative and obfuscatIve trick in the book to maximize the profit and shelf life of their obsolete business models and technologies.
So communications – a pillar of the Internet, the core of business now and since the beginning of time, and the foundation of everything else society is built on – is still wide open and up for grabs. Everyone knows communication is going to be radically changed, but nobody is exactly sure (yet) by who, using what, or when. But when close to half a billon people choose a company to replace email, IM, SMS and telephone, it’s worth something. Apparently, just around $19 Billion.