Science and Tech

Actions

BBM Could've Been WhatsApp, But It's Not, So Now What?

Facebook's WhatsApp acquisition was tectonically large — simultaneously shifting the market fortunes of other messaging apps.
Posted at 3:35 PM, Feb 20, 2014

Facebook's $19 billion acquisition of messaging service WhatsApp was the biggest deal in tech since 2001, when Time Warner and AOL merged.

The buyout has some in the tech sphere wondering: If WhatsApp could do it, why not some other app? Like, say, BlackBerry Messenger? (Via Bloomberg)

"They've got 80 million users. It's not the 450 million that WhatsApp has, but it's a big chunk of users all the same." (Via CTV)

Of course, WhatsApp is growing by a million users a day. CNET suggests without similar growth, BBM doesn't rate that level of interest.

"At 80 million users, BBM lacks the scale of a WhatsApp, and as Facebook demonstrated, valuations can rise or fall dramatically based on how large a base of users you command."

Imagine for a second Facebook bought out BlackBerry’s messenger division for the same price per user at which it just absorbed WhatsApp: $42 a user for 80 million users is $3.36 billion. That's getting close to BlackBerry's existing market cap.

TechnoBuffalo says that could be the reason BlackBerry climbed in after-hours trading following the WhatsApp deal.

"The WhatsApp acquisition shows the value of BlackBerry and, more specifically, the value of BlackBerry Messenger and its users. … There are probably investors out there who think the firm is undervalued."

At time of writing, BlackBerry's stock is up more than 5 percent — a free quarter-billion dollars in market cap, simply for existing alongside WhatsApp. (Via Google)

Looking past the short-term boost, it's not clear how BlackBerry plans to grow its messenger business.

A recent report in the The Wall Street Journal said BlackBerry was looking to focus on the enterprise market but didn't go into specifics.