Marketers seeking to describe the potential market base for their products use the fishing metaphor in the race to reel in lucrative hauls before the feeding frenzy turns the ocean red as the industrial sharks come in and take over.
That’s what’s happening in the social media world as now the big guys like Facebook, with over 1.2 million users, know the planet has a finite number of potential Facebook users and they want as many of them as they can get. Zuckerberg has said as much. Facebook’s most recent and huge acquisition of fast-growing text messaging app, WhatsApp, is part of that blue water – red water strategy. WhatsApp is Facebook’s fishfinder to lure users Facebook thinks it’s either losing or wants to attract.
WhatsApp fits that bill like Snapshat did. Snapchat didn’t take the $3 billion bait, though. Facebook upped the ante to $19 billion, reportedly spurred on by rival Microsoft’s and Yahoo’s bids, and WhatsApp bit.
WhatsApp has big cred. It has startling growth. Faster than Facebook’s was in the early days and faster than Twitter (no wonder Twitter is mad or maybe just envious) of the acquisition. WhatsApp’s 450 million users generate messaging volume now approaching the entire volume of all text messages sent globally. That’s a hell of a scale-up.
So, you might ask regarding Facebook’s latest deal, why WhatsApp and why now and why so much?
Two reasons. First, Facebook has a new strategy–build or acquire a family of apps instead of trying to build its core base of users. Sometimes you can’t do it all on your own. Nobody’s that smart, not even Mark Zuckerberg. And second, Facebook is approaching the size and scale of companies like Hewlett-Packard that risks “innovation dilemma,” the classical Darwinian “Catch 22” that Harvard Business School professor and scholar Clayton Christensen says allows smaller companies to slowly but inevitably eat their competitors’ lunches. Kind of like “Too Big to Fail” except it’s “Too Big to Try.” Classic David vs. Goliath.
In the meantime, Facebook fishes where the fish are in water becoming increasingly red.
Here comes everybody and we’re only at the beginning of the social network revolution, so buckle in to your fisherman’s chair.
David Gelles and Vindu Goel put the acquisition succinctly and expertly in their front-page piece in today’s NY Times: