Rumor Mill: Google in talks to acquire WhatsApp for $1B
Google (NASDAQ:GOOG) is close to an agreement to acquire fast-growing over-the-top messaging application WhatsApp, insiders tell Digital Trends.
Sources close to the talks say Google and WhatsApp first entered negotiations roughly a month ago, adding that WhatsApp is "playing hardball" and seeking a purchase price in the neighborhood of $1 billion. Although WhatsApp has never disclosed details on its finances, Digital Trends reports the startup now generates roughly $100 million in annual revenues. Neither Google nor WhatsApp has responded to requests for comment.
WhatsApp Messenger enables users to share text messages, voice notes and photos with contacts across the globe, without international messaging fees. The company has chosen to avoid advertising support, instead offering its iPhone app for a one-time download fee of $0.99 while billing Android, BlackBerry (NASDAQ:BBRY) and Windows Phone users $0.99 per year after a one-year free trial period. WhatsApp users across all mobile platforms now transmit roughly 17 billion messages daily (7 billion inbound and 10 billion outbound), with more than 100 million users on Google's Android OS alone, CEO Jan Koum said last month.
Acquiring WhatsApp would help Google to unify its disparate messaging services under one umbrella. Last month, Geek.com reported Google is readying Babble (or possibly "Babel"), a cross-platform application that combines messaging and chat options including Google Talk, Google+ Messenger, Hangout and Drive Chat into a single service. Insiders say Babble will integrate signature features of each service, enabling users to share photos in chat windows à la Google+ Messenger or start Hangout conversations with anyone in their contacts list.
It is unclear exactly how WhatsApp would fit into the Babble model, but the service's popularity and multi-platform reach would undoubtedly help Google mount a serious challenge to Apple's (NASDAQ:AAPL) iMessage (which transmits more than 2 billion messages per day between iOS devices) and BlackBerry Messenger (used by three out of every four BlackBerry device owners, corresponding to roughly 60 million active users worldwide) as well as conventional operator messaging offerings and OTT options like Facebook (NASDAQ:FB) Messenger and Viber.
Late last year, AllThingsD reported both Google and Facebook have explored buying WhatsApp at different times, adding that Google Corporate Development Manager Neeraj Arora found the startup so compelling that in November 2011 he joined the WhatsApp staff and now holds the title Business Guy.
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