SEOUL, South Korea (AP) — Facebook's announcement it is paying $19 billion in cash and stock to acquire WhatsApp is a milestone in the short history of mobile messaging apps. Hundreds of millions of people have downloaded such apps to their smartphones and tablets to chat and share photos and videos for free, making them potent rivals to Facebook. WhatsApp alone has 450 million active monthly users.
The stunning price tag for a company that employs just 55 people is likely to boost valuations of other messaging applications and also stoke worries about a new tech bubble. Many of the apps are still figuring out how to make money from big pools of users.
Their main features are free messaging and voice calls between two individuals or in groups. Some have been adding gift buying and mobile games. They are already undercutting the mainstay businesses of mobile phone network companies: text messages and voice calls.
Some of the most popular messaging apps were developed in Asia, where a slew of competitors are vying for dominance.
Developed by Naver Corp. in 2011, LINE is a free messaging app that has become hugely successful in Japan and Southeast Asian countries such as Thailand. It built its popularity around cute "stickers" of animal or comic characters that users can share in chat rooms. As of November, 300 million people were using LINE around the world. In less than three years, LINE has become a cash cow for Naver, which operates South Korea's most visited web portal but is little known outside of East Asia. Its money making prowess makes it a rarity among messaging apps. Most of the app's revenue comes from mobile games. Some also comes from sticker sales which cost about $1 for a dozen. LINE raked in revenue of 454.2 billion won ($423 million) in 2013.
Created by Cyprus-based Viber Media, Viber offers its core Internet phone call function for free to its 280 million global users. Japan's top online retailer Rakuten Inc. said last week it will buy Viber for $900 million as the retail giant is eager to expand outside Japan. Rakuten founder Hiroshi Mikitani sees Viber as a potential platform for games and other content. Viber users can make video calls and exchange photos and messages between mobile devices and desktop computers. Access from a desktop computer is a feature that more mobile messenger apps are offering as they want users to stick with their service as they shift between devices.