Messaging apps: Skype has competition. Facebook too.

Dan Weissmann Feb 14, 2014
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Messaging apps: Skype has competition. Facebook too.

Dan Weissmann Feb 14, 2014
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Today, a Japanese e-commerce giant called Rakuten bought a messaging app called Viber for $900 million. It’s one of several apps for smartphones that provide free texting and even voice calls, including WhatsApp and Line.

In the U.S. it might not seem clear why any of them could be worth $900 million. But they’re huge in countries like China, where one called WeChat dominates. 

Julie Ask, principal analyst at Forrester Research, explains why: They’re awesome.

“I would say to anyone who wants to understand what the craze is all about: Go download something like WeChat,” she says. “Get four or five of your friends to do it, and play with it for a week. You’ll be totally hooked. The feature set is so much richer than messaging on a mobile phone. There’s so much more you can do with it.”

Sending videos, pictures, cute little stickers—anything you can imagine, to anyone you want, most of it for free. It basically replaces your voice plan, your texting plan, and half of Facebook.

The apps have e-commerce sites, too. With apps built on top of WeChat, in China you can use it to order dinner. Or a taxi.

“These apps aren’t apps,” Ask says. “They’re platforms.”

It makes sense for a retailer like Rakuten to want in on that business, says Adib Ghubril, research director at the tech consulting firm Gartner.

“Retailers want to understand their customers better,” he says, “and part of understanding them better is to get them talking.”

In other words: What if Amazon knew you as well as Facebook does? 

Viber has 300 million users, so that’s a big head start. Altimeter Group founder Charlene Li thinks Rakuten just picked up a major asset.

“They instantly bought access to 300 million people,” she says. 

That’s not as many as Facebook, but it’s growing fast. And Facebook couldn’t be purchased for $900 million. 

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