back to article What's up with that WhatsApp $19bn price tag? Answer: Voice calls

Multibillion-dollar chat app WhatsApp will let users make voice calls, it was announced today. Its makers said that in the second quarter of 2014 it would begin rolling out support for voice comms for iOS and Android devices with Windows Phone and BlackBerry support planned for a later date. Announcing the new service at a …

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  1. David Pearce

    WhatsApp is popular in the Middle East. Several countries there ban VOIP as it cuts their (very expensive) international call revenue and is harder to tap

    1. Anonymous Coward
      Anonymous Coward

      VoIP is actually easy to tap unless it's in a secure tunnel, but this places WhatsApp even in a better position to create a global data tap on everyone. It's a bigger data goldmine for the US than FB is.

      First off, it copies your entire address book, so as long as you communicate with ANYONE who has your phone number, your own number is now known.

      Secondly, there's SMS marketing as a massive problem waiting to happen.

      If that starts, you will have nowhere to hide as you cannot switch it off, and remember, politicians think that opt-OUT is a sensible restriction, leaving you with a whack-a-mole problem. The only thing stopping this from happening right now is costs. This is, incidentally, as far as I can see ther REAL reason behind the frantic "give us your mobile number" attempts to "make your account more secure" prompts by FP and Google - they want to be in the front line when this starts happening.

      Thirdly, there is SMS intercept. Your SMS traffic is moderately protected by your telco so it needs a warrant to be collected, and it gets more complicated on a global scale. WhatsApp has been absolutely brilliant for US intelligence by moving all such traffic to an easy-to access server park in the US which gives them trending (so-called "atmospherics") as well as meta data and contents without any need for pesky foreign collaboration.

      And now, voice intercepts. First of all, if the Middle East countries want to bar it it's not hard to do, WhatsApp does zero traffic cloaking so it's a matter of setting up a couple of decent filters. However, WhatsApp does not protect its traffic (FYI, most VoIP apps don't bother - ask Viber) so tapping it will be easy. If not, ban. Thirdly, exporting meta data to the US will be all automatic.

      And all eyes are on the NSA ...

      1. alain williams Silver badge

        Who really bought WhatsApp

        So what you are really saying is that Facebook bought WhatsApp because the NSA could not be seen to be buying it themselves ? Ie Facebook is acting as a NSA proxy/agent ?

        1. Don Jefe

          Re: Who really bought WhatsApp

          Nah. That's what Palantir is for. With them there's no need to deal with smug little shit of a CEO plus the routes for obfuscated funds are already in place.

  2. R 11

    Great. Expect random fluctuation in latency

    It's pretty easy to make voip work really poorly on a given network. Random fluctuations in latency are almost impossible to work around. A little bit of congestion and your call becomes useless. I don't see networks who have already lost so much revenue from text messaging handing their voice revenue over too.

    1. LDS Silver badge

      Re: Great. Expect random fluctuation in latency

      That's why QoS exists.... but a simple app can't control it, it's up to the network provider. IMHO it does make sense to pay a little more for prioritezed packets - but sometimes you can cope with latency and other issues if your calls don't need a very high quality, and all you need is a cheap call.

      1. Anonymous Coward
        Anonymous Coward

        Re: Great. Expect random fluctuation in latency

        "it does make sense to pay a little more for prioritezed packets"

        No! No it does not. Humans love two tier everything, the weak need to feel superior. Leave the internet alone!

    2. Anonymous Coward
      Anonymous Coward

      Re: Great. Expect random fluctuation in latency

      "Random fluctuations in latency" Jitter. Impossible to work around? Depends on the physical layer I suppose.

  3. Arctic fox

    I think that we may see the mother of all cage fights in the US market.

    After all the mobile operators are not going to sit still for this and they have some of the best politicians money can buy in their pockets.

    1. NullReference Exception

      Re: I think that we may see the mother of all cage fights in the US market.

      Except that most U.S. carriers now include unlimited talk & text in their plans but have data quotas with overage charges. (A few years ago it was the other way around.) So, at least as far as domestic usage is concerned, the "problem" may solve itself. International calls are a different matter.

      On the other hand, on 4G/LTE networks, "voice calls" are internally implemented as VoIP. Could get interesting...

    2. Don Jefe

      Re: I think that we may see the mother of all cage fights in the US market.

      @Arctic Fox

      You are absolutely correct. Telecoms in the US is probably the most (what's a synonym for corrupt that doesn't imply criminality?) industry in the US. Huge tax dollars go into secondary subsidies of the telco industry and everything is fairly well balanced between the government and the network operators. They won't allow that balance to be upset.

      There are a few industries here that nobody messes with and telecoms is one of them. You can't play there if you don't have the clout to steer national policy. Facebook does not have what it takes to do that.

  4. Marketing Hack Silver badge

    I wonder how well this service is going to work with data roaming

    I for example have problems getting mobile internet or email if I am roaming. I can get text messages and of course phone. Part of the attraction of WhatsApp voice would be to replace roaming phone calls with VOIP calls through WhatsApp.

    And I agree with what Arctic Fox said above about U.S. mobile carriers fighting this tooth and nail--have an upvote!

    1. LDS Silver badge

      Re: I wonder how well this service is going to work with data roaming

      When you're abroad you can take advantage of free or cheap wifi to use such a services, I routinely use hotel or offices wifi to place calls via Skype when I'm abroad, especially when I'm in countries leading to crazy roaming fees (Vodafone asks me 3€/min to call from/to some countries).

      Otherwise if you travel often enough to a give country you can get a local SIM with a data plan which is usually far cheaper than roaming calls or data. The greed of some telcos is killing their revenues from roaming, because they ask so much money people are getting smarter and find cheaper ways to call/message.

      1. Marketing Hack Silver badge

        Re: I wonder how well this service is going to work with data roaming

        Yes, but I don't necessarily want to be tied to a WiFi hotspot. If WhatsApp had something that could work without a hotspot on a roaming basis, that could be compelling.

  5. solo
    Paris Hilton

    Cheap and creepy

    So delicious.

    However, you'd have to be careful if you're suggesting some nasty product/brand to your pal/mate on call. The audio recognition will dig for it and post on your wall.. and post on others' wall that you just promoted it ;)

  6. Daniel Voyce

    I would be much happier with Video calls

    Surely video calling would be a logic step after this? The market is pretty much dominated by either Facetime (iOS only) or Skype, if it is true that they are planning on creating a desktop application this might actually be the first platform that could challenge Skype and to be honest I would embrace it if they created a Linux client for it as the state of Skype on Linux at the mo is questionable at best!

    However if this means I can sack off Viber then it gets a Thumbs Up from me!

    1. LDS Silver badge

      Re: I would be much happier with Video calls

      Ask yourself why Skype is very little interested in a Linux client... do you believe FB/Whatspp would be more interested?

      1. Dave 126 Silver badge

        Re: I would be much happier with Video calls

        >Ask yourself why Skype is very little interested in a Linux client... do you believe FB/Whatspp would be more interested?

        Er, because a) Skype is owned by MS, who make money from Windows, a competitor to Windows, and b) Linux doesn't enjoy the desktop market share either of WinXYZ or OSX, according to any of the fuzzy metrics available. As far as I know, a Facebook video chat session could be implemented in an HTML 5 browser.

        What'sApp doesn't have a desktop client for any platform AFAIK... though might it work on an Android emulator on a laptop with a SIM? I dunno.

        (I may be wrong, i haven't played with Linux for a while)

        1. LDS Silver badge

          Re: I would be much happier with Video calls

          It's interest was little even before it was acquired by MS - and it does support iOS and Android which are MS competitors in the mobile space. From many perspective MS should be interested to bring as many people as it could to Skype, because these kind of services are more useful as more users you can reach with it. Yet I would like to know how many users buy Skype premium services on different platforms. Maybe if Linux users are very little willingly to buy them compared to other users, there's very little incentive to support an OS with very little desktop share (servers don't call with Skype...) and whose users don't spend on Skype.

        2. Don Jefe

          Re: I would be much happier with Video calls

          Skype never showed much interest in Linux and it has nothing to do with ownership by MS. Skype was a huge mistake that never should have happened. Ever. Nobody considered a Linux port because as soon as they touched Skype all their attention turned to how to get rid of it.

          Skype is one of the funniest companies in all of the novelty IT sector. Everybody laughs at Skype and all the aborted attempts to turn it into an actual business. Every major company in the world has looked at buying Skype at least once and most everybody backs out quickly when they see there is no viable way to recover the insanely high purchase price.

          It has been a joke for so long now it kind of wore itself out. It was such a big joke that the financial press services let people slide obviously false press releases in and get them blasted out to every CEO, Board, Investment Banks and Brokerage on the planet. Hell, Bloomberg ran a press release saying Commodore had purchased Skype as an announcement to the world the brand was reemerging, but this time as a hazardous waste disposal company. Financial news services don't have a sense of humor, thats SEC regulation.

          Skype was also considered the easiest way to get rid of unwanted higher level staff: 'God, Johnson in Opps is such a dick. I would fire him in a millisecond if it wasn't for his severance package. Oh shit! Call finance, buy Skype and make Johnson EVP of VOIP or something. I want press releases rolling out tomorrow. No severance if he quits and those options go back in the pot! Genius. That is why I get paid the big bucks.'

          The most money made having to do with anything Skype was by the legal and finance specialists you bring in for big deals and the companies that developed all the infrastructure level tech that telecom companies put in place to control voice service losses and maintain network control. Take a peek at the companies that put out the Skype specific lawful intercept and revenue leakage tech. Interestingly enough, they also provided much of the equipment in the Bush MkII era 'secret room' surveillance and the NSA programs we all know and love today. People have been listening in on Skype calls before Skype ever had its first logo updated.

          There was never even a remote possibility of Skype making making money. Every time it has been purchased it has been by a desperate corporate leader who had run out of good ideas. Apotheker wanted to buy it as well, but he was successfully put out of our misery before he got a chance. The same will be true of WhatsApp. There is no other industry, not one, that's closer to governments than telecom (including defense).

          Nobody is going to be allowed to interfere with that. Zuckerberg is about to get his first lesson in why you don't go sticking your dick in other people's pork barrel pie. Only stupid people and actual, real life, psychopaths get into telecom service offerings. There is no more punishing way to make money than as a telecom exec (even politicians have it better). Weapons systems and telecom are the only two industries our investment group won't even look at; ever. Take that shit somewhere else.

  7. DougS Silver badge

    No, that's not an answer

    Facebook already has a billion users, and they could add voice calling capability to their platform for a lot less than $19 billion.

    I'll bet the real plan is that since a lot of these people are overseas and are not Facebook users, they'll force everyone using WhatsApp to login via Facebook. That way they'll greatly increase the claimed number of daily users in Facebook, and fool investors into thinking they're still growing.

  8. Charles Manning

    Free, free, free...

    That's what the pigs think too when the farmer brings their slops: Look at this great guy who brings us FOOD for FREE, no rooting and digging required. Just eat all this free food. How great life is! Then next day the truck comes loads the pigs and takes them for slaughter.

    Here's the hint people. When you get free stuff on the interwebs, you're being farmed. Little Zuckerboy is in out back doing deals with the data and eyeball buyers to get a good price for his bitches and their data.

    1. Anonymous Coward
      Anonymous Coward

      Re: Free, free, free...

      "Look at this great guy who brings us FOOD for FREE, no rooting and digging required"

      Never mind FB, there's The Company That Must Not Be Named busy owning search and mobile through the same strategy.

      Curiously, that most successful of pig swill providers has no worthwhile offering in the VOIP space (no, I don't count Google Voice), which means that Facebook have made a $19bn bet on making money from VOIP, even after Microsoft wasted $8.5bn on Skype, for a product that simply makes no money, and has no real appeal to their corporate users.

      VOIP: An event horizon for investor's cash.

      1. theblackhand Silver badge

        Re: Free, free, free...

        MS buying Skype was about providing a reason for enterprises to move away from their costly PBX's onto Lync (why just have voice when you can have IM/voice/video). MS aren't silly enough to directly attack the telco's at this point. Maybe in the future but they are playing very nicely at present.

        Google seems happy to have client devices that send all the data back to the cloud and leave the voice/data side to the telco's. Again, playing nicely.

        I'm not entirely sure there is a lot of money to be had in voice - the telco's know how to squeeze out new player's in markets. I suspect Facebook would be looking at the markets that haven't been deregulated to make money. Sure voice over consumer Internet may not be great but if it only costs a Facebook account then who cares about the quality.

    2. Jim 59

      Re: Free, free, free...

      Well said re the farm.

      I don't get the Whatsapp business model anyway. It seems to depend upon small details in peoples' phone contracts. Eg. like many people, I get free unlimited texts with my package, so Whatsapp is no use to me. Other packages give say 5000 texts a month, again no scope for Whatsapp. Even where there is a benefit, Whatsapp simply moves the cost from your SMS allowance to your data allowance.

      What I am trying to say is any provider can knockout Whatsapp with a few small contract adjustments. And making small contract adjustments is what the networks are good at. Seems to be a non-business.

      1. Pseudonymous Coward

        Re: Free, free, free...

        > I don't get the Whatsapp business model anyway. It seems to depend upon small details in peoples' phone contracts. Eg. like many people, I get free unlimited texts with my package

        What I liked about Whatsapp vs SMS was that it's free across borders while international SMS still do cost money, the group chats came in handy every now and again and you can send pictures (better/cheaper than MMS) and sounds, all for the cost of 99 cents per year.

  9. John Smith 19 Gold badge
    WTF?

    $19Bn for this?

    And "Hey look I can (sort of) do VoIP over my mobile"

    Yay. for that.

    @Charles Manning

    "Little Zuckerboy is in out back doing deals with the data and eyeball buyers to get a good price for his bitches and their data."

    Now that sounds more like it.

  10. Anonymous Coward
    Anonymous Coward

    But Viber already does voice calls, right? And Rakuten paid only $900m for that, albeit with 'only' 200m users.

    Or am I still missing something? Is this the difference in real world versus valley valuations?

  11. LDS Silver badge

    Skype is doing thef for ages... what's new?

    So we have another Skype clone, which was probably the clone of something else... what's new in another "walled garden" application which lets you calling people who use it only? At least with Skype I can call plain phones abroad at a decent price (compared to the crazy price, up to 3€/min of telcos here), without asking them to install Skype, if they don't (or can't) use it. Is another Skype app for mobile worth $19bn??

    1. Charlie Clark Silver badge

      Re: Skype is doing thef for ages... what's new?

      Technologically the WhatsApp deal is not interesting. Skype's been out there for a while, I find the voice / video in Google Hangout's very good, which has the added "bonus" of already working with WebRTC, and there are now even open source solutions out there. However, scaling VOIP up and providing a reliable service for hundreds of millions isn't for the faint-hearted. As many have pointed out: the networks can easily play nastily unless the get cut in.

      The money isn't real money - it's mainly a stock deal albeit plus a handsome pay-off for the VCs. Not sure if any of them are on Facebook's board. If so there might be a conflict of interest, except you can't have one for a private company so it would be down to shareholders getting off their butts and taking action (not going to happen as presumably the big ones are in on the pay-off).

      No, the deal for Facebook was always about closing down the competition: there shall be one social network and Facebook is its name. Here, money doesn't matter and costs are usually offset against tax anyway (investors will accept lower profits in exchange for higher shareprices because of the favourable treatment of capital gains) and the long term expectation that market domination will lead to monetisation. Personally, I think Rakuten's valuation of Viber was probably close to the money.

      Microsoft still thinks it's going to make money from Skype/Lync in the corporate world. One of my clients is big on Microsoft but they're currently rolling out Cisco kit which links into Lync and BBM still dominates the messaging space. But, who knows? Maybe corporates will get worried about the future of BlackBerry and turn to Microsoft.

      1. LDS Silver badge

        Re: Skype is doing thef for ages... what's new?

        "already working with WebRTC"

        Frankly I can't understand this mania to multiplex everything over HTTP and create a TCP/IP-like layer over HTTP that already runs over TCP/IP. It's Google pushing hard this way, and shows how stupid are Google engineers in their attempts to gather as many data as they could - while creating a lot of useles protocols that just introduce more overhead in processing them (and more headaches to sysadmin trying to unterstand what's running over their networks and stop unwanted applications) . Yes, I know the reason, bypass firewall/proxies/etc. Just we already have designed and built firewall/proxies to inspect and block all their stupid "TCP/IP over HTTP" protocols...

  12. Ian Watkinson

    Unlimited Calls Cheap, Unlimited Text Cheap - Unlimited Data..not so

    It's difficult to find a deal that doesn't offer unlimited voice calls, most also offer unlimited or a huge amount of texts, the same don't offer unlimited data.

    Going from 1Gb to 4Gb normally costs you £5-£10 a month.

    So why would I want to use more data to replace voice/text?

    Only for international use, which whatsapp works for. But then again, so does viber/kik/skype/hangouts and a myriad of others.

    Don't think this is much of a step forward.

  13. Saul Dobney

    I get confused here. Why is VOIP with Whatsapp any different from Skype or other VOIP? Don't telcos already ban or curtail this type of traffic? And telcos already know who you call, where from etc. so why is Whatsapp different? Isn't there a risk that adding voice brings in other regulatory bodies who might spoil the party?

    Wouldn't the main reason be to get at better location-based advertising? Users will have their phone on and will be receiving chats. So Facebook tracks the location and sends localised ads/offers/coupons via chat based on location, demographics or other profile information that it has. The coupon is scanned off the phone at the till (or payment by phone) and then 'liked' to friends in the vicinity.

  14. Robert E A Harvey

    who are all these users

    Twit.tv says that Whatsapp is big in Europe because it is cheaper than cross-border texting. You say that it's big in the orient ditto ditto. I'm an international service engineer, I go to dozens of countries and meet hundreds of people. I've never met a whatsapp customer asking if I am one too. Never.

    Who are all these gazillions of users?

    1. Anonymous Coward
      Anonymous Coward

      Re: who are all these users

      You are hanging with the wrong people, and you are probably lucky. I know (for example) most of my friends who are blue collar use WhatsApp, a smattering of professionals (read clerks) and a couple of serious professionals - you know, psychiatrists and the like - but they're mostly just trying to be cool.

      It's the blind leading the blind with a few rich cool kids trying to keep up with what the other so-called cool kids are doing.

      I wouldn't touch it with a stick personally, and I feel I'm missing nothing.

      1. Anonymous Coward
        Anonymous Coward

        Re: who are all these users

        EXACTLY!

        In my experience people I know who use WhatsApp hardly ever make voice calls full stop. A whole generation or more use their phones mainly for text based chat.

  15. Anonymous Coward
    Anonymous Coward

    So if I understand this right...

    Whatsapp is tied to a phone number. So I have to have a working phone number before I can use WA VOIP. Um....

    1. Anonymous Coward
      Anonymous Coward

      Re: So if I understand this right...

      Yes, you need a working, connected phone to use a data enabled phone app.

      In other news, you need to cover your skin with clothes in order to not be nude. Cars have wheels and in breaking news just in, you need to breath in order to live.

  16. Anonymous Coward
    Anonymous Coward

    the reason spain uses WhatsApp and not viber for text is bacause spanish Operators block viop apps like viber. WhatsApp got big because it didnt have voice. id laugh if Telefonica and Vodafone block WhatsApp and kill it. if they dont they'll have to open viber too. if they do neither we can presume so pockets got lined to give WhatsApp viop rights and viber have a good case in the courts.

  17. Andus McCoatover
    Windows

    450 million?

    Whew! Thank Gawd it's restricted to USA only. Isn't it?

  18. Wam

    Well,my teenage son uses it, and more so than Facebook these days. I believe it's easy to do group messaging, but hey, what do I know?

  19. Enrico Vanni

    Virgin Media...

    ..have been pushing their own version of this (SmartCall App) for a wee while now. Is this just going to turn into another licensed branding exercise? Does WhatsApp have that amount of brand recognition.

  20. Christopher O'Neill

    My mobile data provider (T-Mobile, or whatever it calls itself now) specifically disallows VOIP in the T&Cs, I'd imagine other network operators do also.

  21. Joel 1

    Actually my family's main use of WhatsApp is sending videos/pictures around instead of MMS - too many networks charge extra for these, when it should really just come out of the data bundle. But it's only marginal - slightly easier than emailing them, or sharing with dropbox.

    Advantage over Skype is that I can send the picture when convenient to me, and it is received at the other end when convenient for them. With Skype, it wants to have a real time confirmation to send/receive the picture.

    Looking at Telegram now to replace WhatsApp.

  22. g e

    Cos Farcebook having your call data

    Is precisely what everyone wants, right ?

    They'll probably even store the calls, too, hence why they'll optimise the hell out of it to reduce data footprint

  23. Anonymous Coward
    Anonymous Coward

    I see where this is going...(voice call via WhatsApp)...

    Me: Hey Mom and Pop, happy marriage anniversary!

    WhatsApp/FB: <Ting!!> Discount! Discount!! Discount!!! Pizza for grey heads celebrating anniversaries!

    Mom&Pop: Thanks, Son!

    WhatsApp/FB: <Ting!!> Discount! Discount!! Discount!!! Flowers for people celebrating...well whatever!

    Me: So what are you plans?

    WhatsApp/FB: <Ting!!> Discount! Discount!! Discount!!! Fly to Timbuktu to celebrate your anniversary!

    Mom&Pop: Thanks for all those discounts son!

    WhatsApp/FB: <Ting!!> Keep using WhatsApp Voice for more discounts!

    Me: WTF???

    Mom&Pop: Eh??

    Me immediately hangup and uninstall WhatsApp! Mom&Pop struggle to even find hangup button, let alone uninstall option for WhatsApp!

  24. cs94njw

    Hang on a sec. If the networks in the US don't like Netflix, what the hell makes you think they're going to allow WhatsApp traffic on their networks?

    Either the US Gov plans to make net neutrality a reality, or Facebook has wasted a lot of money.

  25. Andy 66

    Personal SIP line + iSIP == Ideal

    For quite a while now, I've had a SIP line at €1/mo that allows unlimited international calls (upto 1hr) that I use with the rather excellent iSIP app.

    Not free, but at €1/mo for two concurrent calls is good enough for me and my family.

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