The lesson from Facebook's acquisition of WhatsApp? Never rest

No company wants to become like Nokia, a firm that failed to keep up

Share

Flick through the business pages of any newspaper and you will see countless stories about acquisitions and takeovers but few of them get people talking quite so much as those involving technology companies.

It is as if the dotcom bubble had never grown to circus-like proportions and burst so dramatically as it did at the turn of the 21st century, ruining companies such as Boo.com and Pets.com in the process.

So it is today that we turn on to news that Facebook has bought WhatsApp in a deal worth $19 billion. It beats, by some margin, the $1 billion the social network paid for the photo-sharing service Instagram. It is also close to tripling the $7.2 billion fee that Microsoft agreed with Nokia for its entire mobile phone business.

But this is good news. WhatsApp was launched five years ago by Americans Brian Acton and Jan Koum, both having decided to leave their jobs at Yahoo! and go it alone. Their mission was a simple one: “building a cool product used globally by everyone.” “Nothing else,” they say, “mattered to us.”

That they achieved their aim is enough cause for celebration. Their “over-the-top” messaging service can be used on any smartphone without users having to eat up text allowances. They have a user base of 400 million each month. A million new users sign up each day. But now Acton and Koum are rich beyond their dreams - just like Instagram founders Kevin Systrom and Mike Krieger before them.

READ MORE: WHAT IS WHATSAPP AND WHAT DOES IT DO?
WHY DID FACEBOOK PAY $19bn FOR WHATSAPP?

What this does is inspire hope. It shows that a good, attractive and well-implemented idea will be rewarded in some way, either through cold hard cash or through popularity. It drives pioneers and entrepreneurs, whether in Silicon Valley or in London's Silicon Roundabout, and it helps to push them forwards.

They see bids like this one succeeding and their jaws drop. Equally, they hear about the people behind the photo messaging app SnapChat rejecting Facebook's $3 billion advance and they know that there is a chance they can also make it big alone.

As a result, we're seeing innovation and challenges. The WhatsApp developers didn't just create a messaging service, they grew it into an effective rival to Facebook which is undoubtedly why it decided to step in with an offer. The ability to create groups within WhatsApp, for example, turned it into a social network in its own right. This in turn inspired other people to have a go-  such as Hike which offers offline and push-to-talk messaging (like walkie-talkies).

 

This keeps everyone on their toes. Those small companies that grow big know they have to keep looking over their shoulder just in case two people in a garage come up with something that takes the world by storm. Investors become more willing to take a gamble on the little people who believe their idea will be a winner.

So nobody rests and, if they do, they are found wanting. Facebook learned this the hard way when it was slow to latch on to the growing numbers of smartphone users. It launched an iPhone website in 2007, the same year that Apple launched its smartphone and an app came a year later but it is only recently that it has started to take advantage of the many features a smartphone has to offer.

As well as acquiring other companies, it is now looking to develop its own initiatives, even if it that means borrowing some ideas. The new Paper app has been very well received, following the likes of Feedly with a news reader fromat that actually makes far better smartphone use of Facebook. It also updated its Android app last month so that it could read text messages on the user's smartphone.

No company wants to become like Nokia, a firm that was once at the top of its game but failed to keep up when Apple and then Android began to dominate the smartphone space. There's a stark reason why, at this moment in time, WhatsApp costs $19 billion and why Nokia can be bought for a small proportion of that sum. The game changes fast, and you’ve got to move with it.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Senior Project Manager

£45000 - £65000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Shopfitter

Negotiable: Recruitment Genius: This is an opportunity to join a successful an...

Recruitment Genius: Digital Sales Account Manager

£25000 - £30000 per annum: Recruitment Genius: A Digital Sales Account Manager...

Recruitment Genius: Trainee Sales Account Manager

£20000 - £25000 per annum: Recruitment Genius: A Trainee Sales Account Manager...

Day In a Page

Read Next
Police officers attempt to stop illegal migrants from jumping onto trucks headed for Britain in the northeastern French port of Calais on October 29, 2014  

Tighter security in Calais won’t solve the problem

Nigel Morris
 

Football needs its Martin Luther moment, and soon

Boyd Tonkin
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin
Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain

You know that headache you’ve got?

Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain
Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?

Scoot commute

Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?
Paul Robeson: The story of how an American icon was driven to death to be told in film

The Paul Robeson story

How an American icon was driven to death to be told in film
10 best satellite navigation systems

Never get lost again: 10 best satellite navigation systems

Keep your vehicle going in the right direction with a clever device
Paul Scholes column: England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil

Paul Scholes column

England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil
Michael Dawson: I’ll thank Spurs after we win says defender as he prepares to return with Hull

Michael Dawson: I’ll thank Spurs after we win

Hull defender faces his struggling former club on Sunday ready to show what they are missing. But he says he will always be grateful to Tottenham
Frank Warren column: Dr Wu has big plans for the professionals yet he should stick to the amateur game

Frank Warren column

Dr Wu has big plans for the professionals yet he should stick to the amateur game
Synagogue attack: Fear unites both sides of Jerusalem as minister warns restoring quiet could take 'months'

Terror unites Jerusalem after synagogue attack

Rising violence and increased police patrols have left residents of all faiths looking over their shoulders
Medecins sans Frontieres: The Ebola crisis has them in the headlines, but their work goes far beyond West Africa

'How do you carry on? You have to...'

The Ebola crisis has Medecins sans Frontieres in the headlines, but their work goes far beyond West Africa
Isis extends its deadly reach with suicide bombing in Kurdish capital

Isis extends its deadly reach with suicide bombing in Kurdish capital

Residents in what was Iraq’s safest city fear an increase in jihadist attacks, reports Patrick Cockburn
Underwater photography competition winners 2014 - in pictures

'Mysterious and inviting' shot of diver wins photography competition

Stunning image of cenote in Mexico takes top prize
Sir John Major: Negative West End portrayals of politicians put people off voting

Sir John Major hits out at theatres

Negative West End portrayals of politicians put people off voting
Kicking Barbie's butt: How the growth of 3D printing enabled me to make an army of custom-made figurines

Kicking Barbie's butt

How the growth of 3D printing enabled toy-designer to make an army of custom-made figurines