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article imageIs the Facebook WhatsApp buy about defense in emerging markets?

By Michael Krebs     Feb 20, 2014 in Business
Facebook's $19 billion acquisition of WhatsApp appears to be a defensive move among teen users and the broader mobile environment, but is it really about international and emerging markets?
Much has already been reported about the Facebook (FB) acquisition of the mobile WhatsApp texting application as a defensive tactic in preserving teen users and in further establishing Facebook among important mobile circles. However, Facebook's WhatsApp move may be more about international and emerging markets.
WhatsApp claims a user base of 450 million, with an additional 1 million signing on every day.
Facebook agreed to acquire WhatsApp for an astounding $19 billion figure, the largest sum ever paid to a venture-funded company, as the Wall Street Journal reported. By way of comparison, Twitter (TWTR) is currently valued at $30 billion.
Twitter may be one part of the objective. While the WhatsApp acquisition is Facebook's largest investment to date, some investors are wondering if the acquisition is meant to be an offensive play against Twitter, as Value Walk speculated in a report on Thursday.
However, the WhatsApp acquisition appeared to help position Facebook in international and emerging markets, as the texting service, like Twitter, is particularly popular outside of the United States. In fact, WhatsApp is the dominant mobile messaging service internationally, particularly in Europe and India, according to TechCrunch.
And among emerging markets, WhatsApp is clearly the messaging application of choice.
"WhatsApp was much more popular than Facebook in several large developing markets, according to data from a small survey conducted by Jana Mobile," TechCrunch's Josh Constine and Kim-Mai Cutler wrote. "In India, Brazil, and Mexico, respondees were 12X to 64X more likely to say WhatsApp is their most used messaging app, compared to Facebook. Those are big countries with tons of users that Facebook needs."
More about Facebook, whatsapp, Twitter, Mobile, Emerging markets
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