Whatsapp now poses serious threat to Facebook

Whatsapp, which has been the most widely downloaded communication app for both iOS and Android in recent months, according to analysis firm App Annie, has been profitable by selling subscriptions to its service for $1 a year. Although it has remained mum about its platform plans, the company has been rumored to be in talks with Asian game publishers about hosting games, according to news reports in South Korea.
   
Goetz declined to address the reports, saying only that because it relied on a subscription business model, Whatsapp did not need to sell games or ads to make money.
   
Still, he said, the Whatsapp team "spends a lot of time thinking about the developer community."
   
DEAL POTENTIAL
   
Established social networking giants could also swoop in for the upstarts - and Facebook has demonstrated its appetite for acquisitions.
   
Indeed, investors are eyeing a round of potentially lucrative buyouts resembling the series of deals involving group messaging applications in 2011.
   
Facebook acquired group messaging app Beluga in March of that year, enlisting its founders to help build its own stand alone app, Messenger, which launched six months later.
   
In late 2010, First Round Capital, an early stage venture capital firm, invested in GroupMe, a group messaging startup that was sold to Skype just fifteen months after it launched.
   
Kent Goldman, a First Round partner who has backed MessageMe, said it was unlikely that the market in the long term could support numerous independent messaging startups, which by their nature become more powerful as they grow larger.
   
"You don't want to be the smallest one when the music stops," he said.

 
REUTERS