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Can Tencent crack US market after Facebook-Whatsapp deal?

Publication Date : 21-02-2014

 

Facebook Inc will pay US$19 billion in cash and stock for WhatsApp, a popular smartphone messaging service.

The lofty price tag shows the world's largest social network's determination to boost its mobile messaging service, a demographic where Facebook's influence has begun to wane.

As the company gains an advantage in tapping into a new and relatively large group of youngsters actively messaging each other, WeChat, the mobile messaging application from China's Internet giant Tencent, which is also aiming to woo the same demographic in the US market, faces a stronger rival now.

WeChat first went global in 2012. It has since made a splash in many emerging markets, including Southeast Asia and Latin America. However, capturing the US market can be difficult, according to Cao Junbo, chief analyst of iResearch Consulting Group.

"All the most popular mobile messaging apps in the world have their own territories. WeChat dominates Chinese mainland market while apps like Line and Kakaotalk have their faithful users in Japan, Korea and other Southeast Asian countries. Whatsapp is the most-commonly used messaging app in the US and Europe".

"It will be hard for any of these services to tap into other markets because users from different cultures have different habits and preferences when it comes to mobile messaging", said Cao. "The apps that dominate Asian market provides social platform, games and other services while Whatsapp only provides messaging service".

 

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