Here’s why I like listening to local news even though it’s rarely “news” by the time they report it. It gives a non-techie perspective to tech events, a different view of how outsiders view the crazy tech scene.
And crazy is what it was on Tuesday when Facebook bought WhatsApp for $16 Billion.
The Bay Area’s local NBC station brought in a technology analyst, Rob Enderle, to discuss the deal. He started well. “It’s an alternative to SMS so that you don’t get text charges,” he said. So far, pretty accurate and a good one-line product description, even if lacking in detail. Then he goes on to discuss the business model.
“It looks on paper to be a money machine but like anything else, boy if you’re making a ton of money but you’re making it because you’re stealing money from the carriers..and the carriers own ecosystem, you gotta figure that they’re going to fix it.”
To me, explaining WhatsApp as a product that “steals” from another company is not fair to WhatsApp. The product provides an alternative solution to what many consumers see as a big problem: the high cost of texting fees, especially internationally. For a measly $1/year subscription fee they help users simplify their usage and lower their bill. From the product perspective they are replacing an existing, faulty product (cell provider’s texting services) and providing value to users with additional features. WhatsApp is providing value, and that isn’t stealing.