Google ostensibly close to buying WhatsApp for $1 billion

WhatsApp, the cross-platform instant messaging application for smartphones, is rumored to be close to negotiating a landmark acquisition deal with Google. Sources reportedly close to the negotiations claim the Internet giant is considering dropping a whopping one billion dollars on the popular service that as of March 2013 had a cool 200 million users, a hundred million ones on Android alone.

The report ties nicely with talk of a new instant messaging brand from Google called Babble, and even more so given Facebook with its new Home UI layer for select Android devices is basically encouraging its one billion users to use its Messenger service right from their Lock screen or from whichever app they happen to be using at any give moment…

DigitalTrends reports that while the deal started four or five weeks ago, “we’ve been told that WhatsApp is ‘playing hardball’ and jockeying for a higher acquisition price, which currently is ‘close to’ $1 billion right now.”

The acquisition might make sense for both parties.

For WhatsApp, Google’s scale and reach would mean rapid adoption, especially on Android devices. More importantly, the software would probably gain video chatting, a feature it’s been conspicuously missing.

WhatsApp’s 200 million users come from more than a hundred countries and across an astounding 750 mobile networks.The number one paid app in more than a hundred countries, WhatsApp on New Years Eve 2012 alone saw a record eighteen billion messages processed in a day.

DigitalTrends lets us in on WhatsApp’s business model, said to pull in about $100 million in revenue:

WhatsApp has a proven monetization scheme. Its yearly but nominal $0.99 subscription fee keeps the service ad-free. Behind the scenes however, WhatsApp also generates revenue through profitable partnerships with international telecommunications companies.

For instance WhatsApp’s monthly local plan in Hong Kong with mobile operator 3 HK costs just $8HK ($1.03 USD) and an international package will run for $48HK ($6.18 USD) per day. And whatever Whatsapp is doing is working: The app has even had a direct hand in declining SMS usage around the world.

It’s interesting that although Google played its cards well with Android, it somehow has managed to drop the ball when it comes to the mobile instant messaging playground.

The company is now rumored to be consolidating its many instant messaging offerings under the new Babble brand so it could certainly use a standout app such as WhatsApp to drive people away from rival offerings and give them another reason to go Android.

The search giant’s Nikhyl Singhal told GigaOM last June that “we have done an incredibly poor job of servicing our users here.”

WhatsApp is thought to be toying with a subscription model on iOS and has suffered its share or privacy-related hiccups. Google previously acquired some other popular developers who made names for themselves creating popular apps for Apple’s iPhone, iPod, iPad and Mac.

Most notably, it boughtemail client Sparrow last Jul and mobile productivity suite QuickOffice in June 2012. Last September, the company unexpectedly acquired Nik Software, the maker of the popular photo editing software Snapseed.

Viber, another popular IM app, has for some time been in a neck and neck race with WhatsApp over which service gets to become the default cross-platform messaging solution on mobile devices.

But taking advantage of Viber’s feature shortages and slow pace of development, WhatsApp zoomed past its rival, which as of February 26, 2013 had 175 million users.

Which one do you prefer for cross-platform messaging, Viber or WhatsApp?