It's not game on for WhatsApp and Facebook, say experts

Out of the blue, February's big story was Facebook's acquisition of chat platform WhatsApp for a cool $19 billion.

Predictably, the world and his wife immediately started speculating what was behind the deal.

Was it a simple case of buying users? Did Facebook pay out for WhatsApp to give investors the impression of growth? Is the social network about to make use of the chat app's database of phone numbers?

Naturally, we asked the Mavens for their take:

Harry Holmwood, MAQL Europe
I don't think it's a question of growth for Facebook. It's more of a defensive move.

Looking at other chat apps like LINE in Japan or KAKAO in Korea, they've grown fast and become the leading social networks there. That has made life more difficult for Facebook to become as dominant in those territories as it is in the west.

There seems to be evidence that a lot of (particularly younger) users are choosing to supplement, or even replace, their Facebook activity with smaller, more intimate social networks of closer friends via messaging apps like Whatsapp or narrower, fun apps like Snapchat.

The logical next step for Whatsapp was to start encroaching more into Facebook's territory, becoming a platform for games or other activities, and generally becoming someone's first choice for social networking. If it did that, it could become a huge threat to Facebook.

So, although the valuation sounds absurd, I think Facebook pretty much had to buy it - and will have to buy other products and services that spring up and gather similar audiences quickly.

It's easy to think Facebook now has so much momentum that it's unstoppable, and its own valuation assumes that to be the case, but things can change very quickly in this market. I still remember Altavista!

John Ozimek, Dimoso
I've read a lot of interesting opinions about whether the deal represents good value or not.

The one I most agree with positions the deal as simply an acquisition of 450 million users - and as Harry said, many of these will prefer WhatsApp to Facebook.

The only way for the deal to make financial sense in the medium term is if Facebook can find a way to get WhatsApp users to monetise at the same level as a ‘native' Facebook user, as currently WhatsApp isn't close to being profitable.

If it is about acquiring new users as organic Facebook growth continues to slow, then we should expect to see more deals for rivals or complimentary businesses that have volume users.

As to whether this might be integrated into some grand gaming play - I don't see it. Of the popular messaging apps WhatsApp is the least aggressive in trying to add other things into the chat experience; there are better targets if you want to have some kind of chat-based distribution strategy.

Oscar Clark, Applifier
Facebook seem to have a assertive approach when it wants to buy a company - being happy to spend to get what it wants even if its not seen as value for money by the outside world

As Harry says, there is a clear migration towards simple messaging services and Facebook want a piece of that pie. From a Facebook perspective, I can see this gives them a team whose focus is reaching out effectively to that lower income audience consolidating Facebook position as the place where ‘Everyone is connected'. Like the mythical shark, it has to be seen to keep moving or die.

I'm also pretty much with John in that it has nothing to do with games - at least directly. However, I am seeing an interesting phenomena with a couple of games I play regularly.

As well as games directly integrated with these kind of services, I see games where players are voluntarily setting up their own group chat sessions to bypass the official messaging tools in a game.

In Galaxy on Fire: Alliances (which I'm shamed to still be playing despite the treatment of Fishlabs original management) we are using LINE to create a secure communication system, especially when attacking other alliances to avoid spys seeing our communications.

This isn't the only game where players find that its more convenient to use alternative chat services rather than the in-built tools.

Perhaps if the Facebook team can recognise the potential for games to drive use both directly and indirectly we will see something truly valuable come from this acquisition.