With over $32 billion lost by mobile carriers to free messaging apps, the buying frenzy for messaging apps has skyrocketed
Facebook's $19 billion purchase of WhatsApp has increased the appeal of other companies that specialize in messaging their users.
Other messaging apps include Kik, KakaoTalk, SnapChat, and BlackBerry's BBM
Bloomberg reports that at least one company, Tango, has received acquisition offers, according to Eric Seton, Tango’s co-founder. Other messaging apps include Kik, KakaoTalk and SnapChat, the photo-sharing tool whose parent company rejected a $3 billion offer from Facebook last year. BlackBerry also has a messaging service called BBM.
Potential buyers include Microsoft Corp and Google Inc, said Brian Blau, a social media analyst at Gartner. Both have expressed interest in acquiring WhatsApp, sources familiar with the matter told the agency. The appeal of these deals is clear: Millions of users in many different parts of the world.
“If you’re a player in the technology industry today, and you’re in the communications industry, you need to find a way to attract people into your … ecosystem,” Blau said. “Almost anyone in the technology space who has a key product that … connects people to each other could be a potential buyer.”.
Facebook chief Mark Zuckerberg's deal to buy WhatsApp, with its 450 million users, was revealed five days after Rakuten acquired Viber, another messaging app, for $900 million.
Almost anyone in the tech space who has a key product that... connects people could be a potential buyer
BlackBerry shares rose 9% after the WhatsApp deal was announced, valuing BlackBerry's BBM service, which has 80 million monthly users, at about $3.4 billion.
Tango.me has 180 million users and features video, voice, text, games and photo sharing. If the $42 per user price Facebook paid to buy WhatsApp is any guide, Tango.me is valued at $7.56 billion.
Potential buyers of messaging companies could also include technology companies such as Yahoo! and Apple, large mobile phone companies or infrastructure providers such as Comcast Corp, Blau noted.
Microsoft is looking for consumer apps that will help make its mobile products more appealing, while Google would be interested in adding data about user behavior from messages to make its products better, he added.
Messaging apps can help a buyer reach across different geographies. WhatsApp is popular in Europe and India, for example. Naver Corp.’s Line is dominant in Japan, while WeChat is widely used in China. KakaoTalk, which had $200 million in revenue in 2013, is installed on 93 percent of smartphones in Korea.
WhatsApp is popular in Europe and India, Line in Japan, while WeChat is very widespread in China
These services have received a significant boost as customers have switched to smartphones with better internet access and started using communication services instead of paying for messages.
Ted Livingston, CEO of Kik Messenger, said that messenger apps are finally emerging from obscurity and will earn high valuations. Kik has over 100 million users.
The popularity of these apps is also costing phone companies, forcing them to consider strategies that include acquisitions, according to Blau. From Vodafone Group Plc to America Movil and Verizon Communications, it is estimated that $32.5 billion will be lost in text messaging fees by 2013 as users flock to apps that offer these donation services. According to research by Ovum, that figure is expected to reach $54 billion by 2016.
Source: thetoc.gr
