WhatsApp Crashes after Earnings Call
A server crash that took WhatsApp offline for several hours underscored both the benefits and the downsides of Facebook’s communications system, which has become a primary method of online chat around the world. In the earnings call held on Wednesday, Facebook CEO Mark Zuckerburg announced that WhatsApp currently has 1.2 billion users. He also covered the success of WhatsApp Status, the company’s counterpart to Snapchat. WhatsApp Status user statistics have now surpassed that of Snapchat itself, with 15 percent of the messenger system’s users logging in daily since its launch in February.
WhatsApp Eerily Reluctant to Address Outage
Users began reporting issues with sending and receiving chats around 5pm Eastern time. While the company has yet to release details about the cause of the crash, a spokesman did provide an apology regarding the disruption. Insiders report that there was a planned upgrade to the system, which may have contributed to the outage. The company received criticism for its lack of transparency, as there were no social media updates regarding the downtime, despite an official Twitter site dedicated to that purpose, which has not been updated in three years. The app’s Facebook page also did not have any posts regarding the crash.
Recall Feature Planned for Upcoming WhatsApp Update
Some of the planned updates may include features long desired by its users, including the ability to recall unread messages within a period of up to five minutes. While this revocation process will be available only for those messages still in transit, the feedback from the Beta users has been positive, and iOS users should have the option shortly. Other updates are expected to offer real-time short term updates such as location markers which will share user GPS information for meetings.
Facebook Wins Big on $22 Billion WhatsApp Gamble
WhatsApp was acquired by Facebook in 2014, for an estimated $22 billion. At the time, the purchase was questioned by market experts, because the app was only reaching about 400 million users, and made just a little over $ 10 million in revenue for 2013. However, Zuckerburg eventually debuted a new marketing strategy which combined WhatApp’s access to user data with Facebook services to produce friend suggestions and personalized advertising. Privacy advocates in Europe have argued against mass sharing between the two parties, and Facebook is currently unable to use WhatsApp data in the U.K. and Germany. However, sources close to EU regulators have hinted that Facebook is close to reaching an agreement for shared data that will be applicable throughout the entire region.
WhatsApp Status Helps Facebook Beat out Snapchat
WhatsApp Status allows users to post status updates that last for only 24 hours and that consist of images and videos. It was originally meant to replace text only status updates. When the service first debuted, WhatsApp Status was treated as superfluous, as Zuckerberg already added a similar services to both Facebook and Instagram. But because WhatsApp is popular in areas that do not have a huge Snapchat base, Facebook viewed this as a perfect opportunity to grow market share, and to freeze Snapchat out of some international markets.
WhatsApp Turns to Digital Payments
WhatsApp is also trying to move into other segments besides communications. In April, Facebook opened up applications for a “digital transactions” position in India, which is one of the largest adopters of online payment services. This is especially the case since India began dropping high-denomination currency notes in an effort to cut out the use of cash, as a way to curb the growth of the country’s rampant black market. WhatsApp hopes to offer an alternative to PayTM, the digital payment provider created by Chinese giant Alibaba.
How Do the Latest WhatsApp Developments Affect Trading?
The timing of the Whatsapp crash for shortly after the Facebook earnings announcement did not go unnoticed, and shares fell by 3 percent, despite posting numbers for revenue and growth that beat analyst expectations. However, long-term Facebook’s stock price will continue to climb as Whatsapp, Instagram, and its other associated services continue to reach new markets. This will also lead to a rise in the DOW and S & P 500. As Facebook and Alibaba go head to head, you can also expect to see a drop in the Shanghai Index, given Facebook’s head start in this market.