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Zuckerberg Takes Long View With WhatsApp, Internet

By Associated Press – Feb 24, 2014 at 4:42PM

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Facebook and WhatsApp appear to hold divergent views on a number of matters, but Zuckerberg said the companies share a common vision in making the world more connected.

NEW YORK (AP) -- Mark Zuckerberg, known for his outsized ambitions for Facebook, is applying a similar long-term vision to bringing the Internet to the billions of people around the world who don't already have access.

During an on-stage interview at the Mobile World Congress in Barcelona, Spain, on Monday, the 29-year-old CEO of Facebook discussed long-term plans for a world in which everyone is able to get online.

Zuckerberg. AP photo.

It was Zuckerberg's most high-profile appearance yet at the world's largest mobile trade show, signaling Facebook's growing influence in mobile communications. The company's mobile footprint has only expanded with its decision to buy WhatsApp, the wildly popular smartphone messaging service, in a surprise deal announced last Wednesday.

While Zuckerberg spent most of his time discussing Internet.org, the ambitious project that aims to get the world online, he couldn't skirt questions about Facebook's decision to pay a staggering $19 billion for WhatsApp.

"WhatsApp is a great company and a great fit for us," Zuckerberg said, calling the service the "most engaging" mobile application that has ever existed -- and one that's well worth its price.

With 465 million monthly members, the service is growing at a faster pace than Facebook ever has and Zuckerberg believes WhatsApp is on track to reach a billion users. It's because of that potential, and not WhatsApp's current revenue stream, that Zuckerberg thinks WhatsApp is worth more than $19 billion. In comparison, Twitter, which has 241 million users, is worth roughly $32 billion, based on its stock price Monday.

Even so, Facebook investors shouldn't expect a windfall from WhatsApp any time soon. Zuckerberg said the acquisition will allow the start-up to focus on growing its user base -- and not on making money -- over the next five years or so.

That echoes earlier comments from WhatsApp CEO Jan Koum at the wireless show. Koum, who announced that WhatsApp will soon offer voice calling as it works to lure more users to its service, stressed that his company has no plans to add "marketing" or advertising to the service and that its staff of 55 is unlikely to grow much.

"We want to operate as a start-up," Koum said.

Though they've known each other for years, Zuckerberg and Koum worked out the Facebook-WhatsApp deal in the 11 days before it was announced last Wednesday. Zuckerberg said that it wasn't until the pair got aligned on the vision for Internet.org and getting everyone in the world connected that they started talking about combining their companies.

Relatively unknown until now in the U.S., WhatsApp is popular in other countries, both in Europe and in emerging economies. Koum and co-founder Brian Acton, both former Yahoo! engineers, started the company five years ago. Unlike Facebook, WhatsApp eschews advertising and instead charges people 99 cents a year after the first year to use the service.

On the surface, Facebook and WhatsApp appear to hold divergent views on a number of matters, but Zuckerberg said the companies share a common vision in making the world more connected. Some 70% of the world's population, or 5 billion people, are still without Internet access. And access, Zuckerberg said, is growing slower than many people in the Internet-connected world believe.

When he announced Internet.org last summer, Zuckerberg noted that since the wealthiest members of the world's population are already connected to the Internet, getting the next billions online is unlikely to be profitable any time soon, if ever.

On Monday, Zuckerberg acknowledged that he "can't construct a model" in which Internet.org's efforts will be profitable for Facebook in the near future.

"I think we are probably going to lose money on this for quite a while," he said, though he added that over time there will likely be some benefit to Facebook.

Judging by Facebook's stock price, investors seem confident in Zuckerberg's long-term view. On Monday, Facebook's shares hit $71.44 in midday trading, their highest level ever.

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