aNewDomain.net — Why does the WhatsApp takeover by Facebook have such an impact beyond the USA? Is the myth about its privacy concerns just a spin and PR? What is WhtasApp real message to us?
(Reuters) – WhatsApp will add free voice-call services for its 450 million customers later this year, laying down a new challenge to telecom network operators just days after Facebook Inc scooped it up for $19 billion.
The text-based messaging service aims to let users make calls by the second quarter, expanding its appeal to help it hit a billion users, WhatsApp CEO Jan Koum said at the Mobile World Congress in Barcelona on Monday.
If you look at the world map of combined Facebook and WhatsApp users you’ll understand the global power this purchase creates. It is at best the power of a unified global strategy. A veritable coming of age of messaging apps. WhassApp slogan “No Ads! No Gimmicks!No Games!” -and “we do-not sell Ads” attracted millions who got a free service.
The mind-boggling $19 billion price tag for WhatsApp indicates the tough competition for the messaging market. WhatsApp was growing at a faster rate than Facebook, especially with the next gen group. Even as experts in the industry commented that Zuckerberg has just bought its next billion users, Facebook made sure that its presence in mobile is guaranteed. This is worth at least a few billion.
That is the new norm for pricing in big takeovers. Each worker at WhatsApp has a value of about $374,000,000. For more, read this analysis.
Together, the two firms cover the world as WhatsApp is strong in Europe, Russia and South East Asia.
We love a rags-to-riches story. WhatsApp founders are known for their anti-advertising stand. Mr. Koum and his 32 engineers also shared an aversion to data collection. But as The Economist put it, “it was a deal he could not refuse.” Many in the Silicon Valley doubt that Koum can maintain his independence, as promised by Zuckerberg.
The Privacy Bluff
PandoDaily uncovered the privacy myth about WhatsApp. It was just that: spin.
How bad is the problem?
It wasn’t till three years after the company’s launch — the end of 2012 — that Koum started securing WhatsApp messages with the most-basic encryption.
From WhatsApp’s launch in 2009 to the end of 2012, the app transmitted messages and sensitive data over the Internet in simple text, allowing anyone with a basic sniffing tool to intercept and read everything its users were sending.
The fact that WhatsApp sent messages in the clear was widely known. In fact, intercepting WhatsApp data was so damn easy someone created an Android app that did just that. It was called “WhatsAppSniffer” and allowed users to grab WhatsApp text messages — including video and picture attachments — sent by anyone connected to the same Wi-Fi network. For more read the full story here.
German experts and press also doubt it. The issues raised in the EU are the result of fallout from NSA-Snowden leaks and how that influences privacy advocates. The Spiegel in Germany says WhatsApp is a “Data monster that is technically not mature,” quoting data protectionists. It believes that Facebook will exploit the data of WhatsApp users for commercial purposes.
Data Protection Officer Thilo Weichert of Schleswig-Holstein recommends boycotting both applications. “I warn against using the two services, and recommend to use German or other European offerings,” Weichert said. He states that the competition has largely been eliminated by the Facebook deal. It’s yet another monopoly, he infers, a monopoly as created by Silicon Valley. So you might pay 99 cents in the second year,but do you trust it?.
The global map below shows the massive numbers from both Facebook and WhatsApp in 2013.
What do you think about the Facebook-WhatsApp deal?
For aNewDomain.net, I’m David Michaelis.
Based in Australia, David Michaelis is a world-renowned international journalist and founder of Link Tv. At aNewDomain.net, he covers the global beat, focusing on politics and other international topics of note for our readers in a variety of forums. Email him at DavidMc@aNewDomain.net.