What price friendship?
Why we’re all looking at the wrong part of the Whatsapp deal
Yes, $16bn, or $19bn is a lot of money. It’s more than many countries GDPs, and more than the value of many household companies. But what Facebook is buying is priceless personalised information which is at the heart of its long-term business model: understanding who and what you like.
Many commentators have got hung up over the price, when Whatsapp will take ads, how will they make money, but that’s such a short term view.
Facebook’s business model relies on knowing what people like, and more importantly who people like.
What better way to find that out than the get inside your smartphone to sniff your whole address book, all of your apps, and furthermore to get explicit permission (watch this space) to sniff all of the conversations that you have with your friends via Whatsapp.
More people are more likely to give them more permission to understand more aspects of their social lives, because it’s all there inside a mobile phone, then they would ever get from a desktop platform. And that’s what Facebook wants.
What Google have done with Gmail — understanding who you email and what you email you about — Facebook is now doing with messaging.
At a time when when email is dying out and messaging is growing pretty much exponentially, it makes perfect sense. Whatsapp already carries more messages than most countries’ mobile phone providers.
Facebook’s play — admittedly spending close to 10% of their own value, moves their information-gathering further up the food chain. Getting inside your mobile phone gives then unprecedented access to to understanding of all of our genuine ‘likes’, ‘dislikes’ and what we actually talk to our real friends about.
I don’t particularly like it — I’ve got a 10 year old, who’s more likely to be on Whatsapp sooner than Facebook, giving away all sorts of information without really thinking about it — but that’s for me to deal with. I can’t fault Facebook’s business logic.
Far from being a ridiculously expensive investment, it strikes me as a very shrewd one.
After all — what price friendship?
