A lot of people wondered why Facebook paid so much money for WhatsApp.
WhatsApp is 100% social, and you don’t have companies in your phone book. Many companies and online services would love to send you messages in your WhatsApp box while it’s free messaging. But they can’t.
What if customers could drop their mobile number at any online site or mobile app via their Facebook login and stay in control over the permission they gave you as a service?
Customers can even withdraw their permission before you even send a message. This is my take on what Facebook could do.
The mobile communication conundrum between companies and customers
We all hate spam in our text/sms message box. That’s why we are hesitant to hand over our mobile phone number to companies for receiving ‘relevant’ SMS messages.
And when we give permission to companies to send us a text message, we are not in control to manage that permission. Ever tried to opt-out of a text message?
Companies who send me the text messages currently pay $0.005 cent per message in the US but outside the US even $0.05 per message to SMS service providers.
An expensive communication channel, difficult to manage and to track and more importantly, not customer friendly (replying costs money). And than we are not even talking about multimedia messaging (MMS) which is the biggest fail in the mobile world.
The solution Facebook and WhatsApp can offer
Facebook offers a login box to drop your phone number at any website or online service. You will be able to simply login with your Facebook account and give the website permission to send you a message on WhatsApp.
You can also define, how many messages and within what timeframe and even what type of messages.
No Facebook or WhatsApp account? Just enter your phone number, set the permission settings and Facebook sends you a download SMS for WhatsApp with password in case you don’t want to use WhatsApp.
After installing and registering WhatsApp, you will be recognized and don’t have to re-enter the permission. No installation? Facebook will deliver the message in the form of an SMS.
The website or online service you gave permission can now for example only send you one pre-defined message and will never know who received it. You’ll stay anonymous because Facebook delivers it. Not the company you gave permission.
As a user you can click in the permission dashboard or click on the senders profile to change your permission settings (increase it or decrease it). When you don’t want to use WhatsApp, you’ll receive a text message.
Revenue and user generator
Companies will pay Facebook $0.005 cent per message and Facebook wins a potential new WhatsApp / Facebook user and in case it will be an SMS they can charge an amount which will always be cheaper than the current SMS price because of their volume.
According to Portio Research there were 3.2bn global subscribers to SMS Marketing. When Facebook increases this market by building thrust and give user control over their permissions it can result into 200 messages per year per user.
And with $0.005 a message this can result into $3.2bn a year in revenue! That’s a good return on investment and puts Facebook in a stronger position to further claim the world of permission marketing.
Of course Facebook could start this service also without WhatsApp but they don’t have a messaging platform which has that many users and is experienced the same as the SMS inbox.
The important question of course remains: Will people trust Facebook for this?
Time will tell…