Google Inc (GOOG) is Getting the Message

While Facebook might have an advantage in technology, it still needs to prove it can leverage its more than 600 million active mobile users to become as successful as WhatsApp. That’s probably why the company was also in talks with WhatsApp last year. Facebook is still playing catch up despite its huge user base, but Home may help convert some of its mobile users to Messenger users too.

Yahoo! Inc. (NASDAQ:YHOO), with its new mobile focus under Marissa Mayer, is a potential threat as well. While the company hasn’t made any significant moves in the space, its subsidiary Yahoo! Japan purchased a 50% stake in WhatsApp’s Korean-based competitor KakaoTalk last October. Since the purchase, KakaoTalk surpassed 10 million downloads in Japan, and is putting increased pressure on Japanese native LINE.

While Mayer seems to be in acquisition mode, something on the scale of WhatsApp doesn’t seem to fit her MO. She’s focusing on small mobile startups (less than $100 million) whose talent and technology integrate well with Yahoo!. But with a wide ranging user base and a focus on mobile, Yahoo! should not be ignored. Additionally, with the quickly growing popularity of messaging apps, it’s not out of the question for Mayer to make an exception.

Bottom line

Google missed the boat in the mobile messaging boom between 2010 and today. If WhatsApp is willing to sell for $1 billion, it really doesn’t look like too high of a price for Google to pay in order to leapfrog the competition, particularly when compared to Facebook’s Instagram acquisition. It’s also an opportunity for the company to stay ahead of Facebook in the messaging space, and beef up its offering to Android users just as Facebook is doing the same.

With such a large stake in mobile already, Google ought to be willing to pay the premium WhatsApp is asking.

The article Google is Getting the Message originally appeared on Fool.com and is written by Adam Levy.