Facebook subsidiary Whatsapp
messaging application came out with video calling feature to enhance its
competitiveness. Recently, Facebook notified all Whatsapp user that it will
access the information of user and intention of doing so is to offer contextual
advertisement. Till now Whatsapp is advertisement free but its matter of time
before they will start converting their 1 Bn userbase with 700 million daily
active user to convert them as cash cow. Globally many companies are offering
messaging application along with video calling and as per the my analysis more
than 3.5 billion users are using messaging applications as per their choice.
I see Whatsapp move as strategy
to kill the competition so that they start monetizing the platform. The
technological robust competitor Skype is also offering voice and video calling
which also include paid service and generate undisclosed revenue for Microsoft.
Skype is mostly used by the prosumer segment where Whatsapp is trying to break
the wall. Skype total user base 740 million but daily active user base stands at
280 million. Skype is generating revenue through paid service, advertisement
and must be generating handsome EBITA on the service.
The newly added video feature in Whatsapp posses all the capability
to attract Skype paid user base. Being a part of most of the Android devices,
Whatsapp easily gets the user base whereas Skype need to invest in order to
acquire user base.
In current Marking module of
mobile applications, it is very important that companies goes for embedding
deal with Smartphone player which is also very cost effective compared to other
mechanism of user acquisition.
Whatsapp move will directly
impact Skype revenue generating potential down the line and Skype needs to
change its strategy of user acquisition to mitigate any competitive risk. Skype
should go for the Smartphone embedding partnership the way UBER just concluded
in India with Micromax. Failing to do so will impact Skype dearly which will be
visible in next six month when user will move from Skype to Whatsapp.
Whatsapp move is nothing but to
kill competition and biggest loser will be Skype.
superb ...
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