Line, a popular alternative text messaging service that originated in Japan, has now become one of the biggest players in this space alongside services such as WhatsApp and Viber, with 85% of its users now being outside of Japan. WhatsApp was recently acquired by Facebook (NASDAQ:FB) for the shocking sum of $19 billion. Now, Bloomberg is reporting that Line is making a big push toward 1 billion users sometime within 2015, which could represent fierce competition for Facebook's expensive new acquisition.
In this segment from Tuesday's Tech Teardown, host Erin Kennedy and Motley Fool tech and telecom bureau chief Evan Niu discuss the rapidly growing message service business, and just how tough the competition here could possibly get. Line currently stands at around 400 million users, with WhatsApp at around 450 million, both with their eye on that 1 billion benchmark. But the message service business isn't a terribly sticky one, with little keeping users from switching over to whichever app is the most popular. If Line ends up cutting into WhatsApp's growth and stealing those users for itself, this could represent a definite risk for Facebook's extremely expensive acquisition.
Erin Kennedy has no position in any stocks mentioned. Evan Niu, CFA has the following options: short January 2015 $60 puts on Facebook and long January 2015 $35 puts on Facebook. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.