IMAGE: Emin Ozkan — 123RF

WhatsApp vs Hangouts: comparing apples with oranges?

Enrique Dans
Enrique Dans

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WhatsApp and Gmail have just announced that they each now have more than one billion users. Good news for WhatsApp, but I have to confess I find it paradoxical that Google has not been able to do better against such a clearly deficient service as WhatsApp.

Instant messaging is the communication choice for growing numbers of people. Looking for greater privacy, the under-30s are leaving the social networks by the horde and turning to closed groups made up of friends, family, or work colleagues, and that can often accommodate dozens of people, making them a comfortable, safe place to comment on news, send videos of kittens, or just chat.

Why hasn’t Google used Gmail and Google Hangouts — which recently incorporated P2P connections in its protocol to improve call quality and speed — to go head to head with WhatsApp? After all, pretty much everybody knows that WhatsApp is a small company with a staff of barely 50 and not much engineering savvy (it wasn’t even able to build a half-way decent encryption protocol). Mysteriously, it has proved itself a lean, mean, fighting machine able to hold its ground.

WhatsApp’s model is supposedly subscription: but strangely enough, hardly any of its users ever received a request for payment, and those that did, but refused to pay were soon rewarded with offers to use the service gratis. Barely three percent of its customer base provided any revenue. In short, WhatsApp’s game was simply to grow as fast as possible so that it could be sold off for a great deal of money, which is what happened.

Google could have launched and positioned its Hangouts to take WhatsApp on. Instead, it allowed the competition to grow, thanks in large part to the simplicity of its product, which attracted user segments with little experience or interest in technology, and creating a defective ecosystem in the process.

So when the app was bought by Facebook, Google realized that it now faced a rival able to overcome its technical shortcomings. Personally, I have been using Google Talk, and then Hangouts, for instant messaging for a long time now. It gives me a lot more options than WhatsApp, which has only the most basic contact management tools, and that only recently finally introduced a computer version, and one that is still plagued by problems.

Google’s failure to take on WhatsApp is one of those oversights that only Google, a company that allowed Reader to die “because it wasn’t on anybody’s priority list,” could make.

We now have a situation where, thanks to Google’s feet of clay, it stands toe to toe with WhatsApp, with a billion users each. WhatsApp’s growth and use cannot be compared to Hangout’s, which gives its owner, Facebook, a franchise that will be increasingly difficult to beat, and that it now aims to further leverage by applying its firepower to the corporate market, where it aims to charge businesses for using WhatsApp as an internal communication channel.

I’m sorry, but I just cannot understand Google’s lack of interest in such a promising segment and its reluctance to take Facebook on. Can we expect some surprises further down the line, or has this already turned into a one-horse race, with the occasional local challenger (careful with the concept of “local”) such as KakaoTalk, WeChat, Viber, etc., taking to the field. In short, are we comparing apples with oranges here?

(En español, aquí)

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Enrique Dans
Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at enriquedans.com)