7 Things You Need to Know About WhatsApp

WhatsApp may have the most users but it's clearly not the only messaging app out there. In fact, it faces at least 50 competitors. So what makes WhatsApp a $19 billion baby?

WhatsApp
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Competitive Landscape

WhatsApp has a commanding lead in volume of users over other messaging apps and services, but its competitors are nipping at its heels. There are at least 50 apps that offer free or nearly free text messaging. Line, WeChat and Viber, which was recently acquired by Japan's Rakuten for $900 million, are each hovering around 300 million users. Skype reported 299 million users last June, two years after it was acquired by Microsoft for $8.5 billion. Apple last reported it had 140 million users on its iMessage service. Kik Messenger and Tango each count about 100 million registered users while BlackBerry's BBM service, the pioneer in mobile messaging, is falling behind with 80 million users.

So what's so special about WhatsApp?

WhatsApp

Impressive Growth Trajectory

During a call with analysts and investors to discuss its acquisition of WhatsApp, Facebook presented a chart that compares the messaging app's growth trajectory with that of Facebook, Gmail, Twitter and Skype through their respective first five years in business. Among those services, only Gmail matched the 50 million user threshold reached by WhatsApp in its second year. Facebook and Gmail both surpassed 100 million users during their fourth year while Twitter and Skype barely passed 50 million users in that same period. WhatsApp grew from about 50 million users at the beginning of year 2 to more than 200 million the following year, when once again it doubled its user base beyond 400 million before celebrating its four-year anniversary.

WhatsApp
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How WhatsApp Works

You can sign up for WhatsApp by entering your mobile phone number. WhatsApp's servers will generate a unique PIN for that number and create a key that acts as a password for all future communication. Using the public switched telephone network system, a request is made to access your phone book and phone number to identify you and determine which of your contacts are already using the service. WhatsApp says communication between your phone and its server are fully encrypted. "We do not store your chat history on our servers. Once delivered successfully to your phone, chat messages are removed from our system," the company says on its site.

WhatsApp
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Virtually Free, Cross-Platform, Low Bandwidth

WhatsApp is a purely mobile cross-platform messaging app that is free for the first year, and 99 cents every year thereafter. The service virtually replicates the SMS and MMS platforms owned and operated by wireless carriers. You can share your location, create groups and send unlimited messages including text, video, audio or images. Like other messaging apps the barrier to entry is minimal since the service runs over IP, but executives claim WhatsApp has a competitive advantage by using the least amount of bandwidth.

WhatsApp
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Internet Phone Calls On the Way

Now that WhatsApp has more than 465 million users and a new owner in Facebook, the company is playing catch-up with services similar to those already offered by its rivals. In a speech at Mobile World Congress in Barcelona, WhatsApp co-founder and CEO Jan Koum announced that the company will introduce voice calling in the second quarter. The voice service will come first to Google's Android and Apple's iOS operating systems, followed by others such as Windows Phone and BlackBerry.

WhatsApp
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Key WhatsApp Statistics

At the time of the Facebook acquisition, WhatsApp had more than 450 million monthly active users with 70 percent using the service every day. At least 1 million new users were joining WhatsApp per day. The messaging volume delivered via WhatsApp is approaching the entire global SMS telecom system with an average of 19 billion messages sent and 34 billion received every day. Those daily messages include more than 600 million photos, 200 million voice messages and 100 million video messages -- all of which doubled year-over-year.

WhatsApp
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Staunchly Anti-Advertising

WhatsApp's anti-advertising attitude is a rarity in social media today. After spending years at Yahoo, the company's founders are diametrically opposed to advertising and have been unafraid to say so since day one. "No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they'll see tomorrow," CEO Jan Koum wrote in a blog post 19 months back. "Advertising isn't just the disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought... Remember, when advertising is involved you the user are the product." Koum concludes: "When people ask us why we charge for WhatsApp, we say "Have you considered the alternative?"