WhatsAp is one of Silicon Valley’s most buzzed-about companies, yet it actively avoids the spotlight, operating out of a small office in Mountain View, Calif., with no sign on the building entrance or on the office door.
Unlike most start-ups eager for media attention, WhatsApp Inc. says it doesn’t want or need it. Its popular mobile messaging app has spread so quickly by word of mouth that in just four years it has amassed hundreds of millions of users who collectively send as many as 18 billion messages a day.
WhatsApp belongs to a new generation of messaging services that are revolutionizing 20-year-old text messaging technology and escalating the mobile messaging wars.
“In many countries, consumers have decided they prefer these mobile messaging apps,” said Tero Kuittinen, an analyst with mobile diagnostics firm Alekstra.
Now they are taking the U.S. by storm. That’s particularly worrisome to wireless carriers that have already lost billions in revenue from customers shifting from text to so-called instant messages such as Apple Inc.’s iMessage service, which each day delivers 2 billion messages free of charge.
But the growing popularity of these mobile apps is not good news for the Silicon Valley tech giants either. Analysts say people use the apps to connect with their closest friends and relatives, creating a new more intimate social network that could rival Facebook Inc. and Google Inc. for the attention of hundreds of millions of users and, eventually, advertising dollars.
Messages sent using the mobile apps, which are offered by third-party developers and downloaded to smartphones, are not limited to 160 characters the way text messages are. They also enable users to be more creative with scribbled notes, doodles and emoji pictograms that express thoughts and emotions that the typed word sometimes cannot. Some apps are adding games and other distractions to hold people’s attention even longer.
Many of the apps are free or charge a small subscription fee — WhatsApp charges $1 a year.
A challenge to Facebook
When Nick Meyer, a 22-year-old graduate student at North Carolina State University, is on his iPhone 4, he’s mostly using an app called Kik to chat with friends, he says. Each day he sends a few hundred messages, yet never messages friends on Facebook unless he’s sitting at his computer.
“Mobile is going to be the main form of communication. In some ways, it already is,” Meyer said.
With the explosion in worldwide sales of smartphones, these apps are already the go-to messaging tool in Europe and Asia, where they have taken a big bite out of texting traffic and profits that text messages generate for wireless carriers. Wireless carriers lost a total of $23 billion in texting revenue as of the end of 2012, research firm Ovum estimates.
Research firm Informa says people are now sending more messages over mobile apps such as WhatsApp than they are text messages — and the trend is accelerating. By the end of this year, traffic from mobile messaging is expected to be more than double that of traditional SMS texts. CTIA – The Wireless Assn., a wireless communications industry group, recently found that Americans sent 2.2 trillion SMS text messages last year, down 5% from 2011.
The trillions of messages from around the globe that run through WhatsApp alone each year already surpass the texting volume of all top four U.S. wireless carriers combined, telecommunications consultant Chetan Sharma said.
MessageMe, don’t text
MessageMe, a free app, launched in March. A week later it had 1 million users. Its most active users send 30,000 messages a day, the San Francisco company said.
“I didn’t know that was physically possible,” MessageMe co-founder Arjun Sethi said.
In mobile, messaging has emerged as the “killer” app, said Ted Livingston, chief executive of Kik Interactive Inc., a Canadian start-up that last month announced it had raised an additional $19.5 million in funding. Kik has 50 million users and adds 200,000 users each day, Livingston said.
Popular apps in the U.S. include WhatsApp, Kik and MessageMe. Kakao Inc.’s KakaoTalk and Tencent Holdings Ltd.’s WeChat are hot in Asian markets.
One popular Asian app is making aggressive moves into the North American market. Line, an app with which users can play games and send virtual “stickers,” reached 100 million users in 19 months. Facebook took about three times as long to reach that level.
Both Facebook and Google reportedly approached WhatsApp about a possible buyout. WhatsApp declined to comment on that but said it plans to remain independent.
Mobile messaging apps work like this: Users download the app to their smartphone and set up a personal profile. They invite friends and family members to download the app to their devices. Then they send one another elaborate messages, which travel over Internet data networks, not over cellular networks the way standard text messages do.
Jan Koum, co-founder and CEO of WhatsApp, says mobile messaging apps make communication richer by making it more personal.
“Fundamentally mobile messaging is personal and real time,” Koum said.
And more creative, says Jessica Jiang, 23, a Web graphic designer from San Jose. Jiang uses Line for the virtual stickers and MessageMe to draw pictures or to doodle on the pictures her friends send to her.
“I use these apps mainly for the convenience and efficiency — the way that you can stay in the same app while sending videos, iTunes music and also photos. It also gives us a personality and expression that you can’t get with just plain text,” Jiang said.
That’s a big driver behind the success of mobile messaging apps, said Dave Morin, CEO and co-founder of mobile social networking service Path.
“People desire a more expressive way to communicate with mobile phones than through basic text messaging,” Morin said.
Mobile messaging began sweeping Asia and Europe as data networks became more robust and the global economic crisis in 2008 spurred interest in cheaper alternatives. Gradually in market after market, mobile messaging began to cannibalize standard texting, analysts say. Then it started to grab time and attention away from popular messaging services from Facebook, Google and Apple too.
“The smartest, brainiest companies in the world were completely out to lunch,” Kuittinen said. “These tiny start-up companies have taken hold of the market.”
Now, he said, technology giants have made mobile messaging a top priority.
Facebook bought Beluga
In 2011, Facebook bought group messaging app Beluga and tasked the founders with building a stand-alone Messenger app for the iPhone and devices running Google’s Android software. In December, Facebook rolled out Poke, its own version of a popular messaging app called Snapchat, which lets users send messages that vanish seconds later.
Last month the giant social network made its biggest move yet, launching Facebook Home. The software takes over the user’s Android smartphone and puts the social network ahead of almost anything else on the phone’s home screen, including mobile messaging apps.
“Facebook ignored messaging for a long time until the realization sank in that some of the eyeballs are actually shifting from checking the News Feed to communications, especially in the younger demographics,” Sharma said.
Google is getting close to unsheathing its own weapon in the mobile messaging wars. It’s working on a messenger service dubbed Babel, which would work on multiple smartphone and tablet brands, so the conversation could sync across a user’s devices. Anyone with a smartphone or tablet running Android or Apple’s iOS operating system would be able to start a “hangout” to chat face to face, reports say. Google declined to comment.
MessageMe’s Sethi predicts that mobile messaging apps will eventually shove aside other forms of electronic communication and that texting, like snail mail, will become more of a utility.
“We want to be the replacement for everyday communication,” Sethi said.