GigaOM’s Lauren Hockenson:
Facebook’s decision to remove messaging from its main app is bound to cause initial pain for users who are resistant to change (and reluctant to toggle between two apps to engage with a single platform), but it’s the smartest, safest choice Facebook can make to keep its service thriving on mobile.
I agreed with everything up until the end:
Features like video messaging, contact exchanging and location sharing are great parts of the WhatsApp experience that would also be at home on Facebook’s Messenger, and could take advantage of Facebook’s video and Maps content to enrich it even further. Furthermore, if Facebook does decide to finally merge WhatsApp with Messenger in the long run, it’s imperative that the company does its best to pluck the best aspects of its acquisition early on to appease loyal WhatsApp users.
Facebook is not merging Messenger with WhatsApp. No way, no how. And definitely not in light of the agreement that the FTC is making both companies live up to with regards to user privacy and data. They both happen to be messaging apps but the two services couldn’t be any different: they each have a different set of users, with different permission settings and different use cases. It makes no sense for them not to be run as stand-alone services and I think like Instagram, Zuck is smart enough to know that WhatsApp has far more value to Facebook the company as a separate service distinct from anything Facebook as a platform comes out with.
The big problem that these products pose to MNOs, it seems to me, is not actually the threat to SMS revenue. Rather, it’s the threat to identity. We do already have number portability, but changing your number remains a major frictional issue reducing churn. But if your contact point moves to FB Messenger or some yet-to-be-founded app that explodes in the next few years, then the SIM you have in your phone today doesn’t matter at all, and you could swap it in and out from week to week depending on which mobile operator was offering the best deal – a great recipe for truly murderous price wars.
Contrast WhatsApp’s model to the two month free trial period offered by Basecamp. A two month free trial is exactly that, a free trial. You can test drive, but especially for business software, it’s not long enough to complete a major project and see the returns. But a year is a different story. Enough time to see if you like it, plus get customer lock-in due to switching costs.
The question is whether or not this model is feasible for apps going after more targeted markets with a smaller potential user base than the reported 450 million active users WhatsApp supposedly has. Could an Office clone for tablets and phones with 5-10 million users, for instance, charge $10 annually after the first year and retain the brunt of its users? If so, it would be immensely profitable, although perhaps not a multi-billion dollar company. But it still requires a financial commitment from the user. Developers burned by offering paid apps might not want to leave behind the relatively “safe bet” of the ad-supported model.
Facebook has, through this acquisition, made the transformation from a web-based social network into a production studio and holding company for a portfolio of in-house productions like Paper and Messenger, combined with some outsourced efforts like Instagram and WhatsApp. When Facebook launched Facebook Home, it tried to change mobile into a Facebook world. But Facebook has not changed mobile. Mobile has changed Facebook.