P006: Messaging, Evolved

This week, it was announced that Facebook had acquired WhatsApp for $16 billion in cash and stock and $3 billion in restricted stock units, setting into motion a commentary cycle that was instructive and insightful and occasionally ridiculously retrograde. Maybe the most useful piece was this week’s episode of The Talk Show which has Ben Thompson of Stratechery and John Gruber going deep on messaging for 2.5 hours. Through it all, it has become clear that messaging is the killer app on mobile and that American cultural attitudes have blinded some (myself included) to opportunities in that market.

Evolutionary Thinking

The easiest thing to understand about messaging is that the market for a good product is literally anyone with a mobile phone and the desire to connect with another human. Because of its enormous size, a company would only need to capture a small slice of the market to be profitable. Hence, most of the messaging products available today are forgoing the risk of innovation and instead are working on refining the experience that was defined by SMS and AOL IM back in the 90’s. The most obvious counter-example, Snapchat, is valued at about 1/5th of WhatsApp so it’s clear that the market is rewarding iterative evolution in messaging products.

With each iteration, a messaging product moves further and further from SMS, but at no point are its customers be confused about its utility. That steady reference point, however, is what drives a lot of the misplaced outrage when a $19B acquisition happens. I mean, it’s basically SMS, right? How hard could it be?

Which New Form of Journalism Are You?

There’s been a great deal of snark and even
a little bit of journalism lately about the latest scourge of your Facebook timeline, Buzzfeed Quizzes. I really like the Nieman article linked above, but I’m happy to play devil’s advocate with one of the best lines in it:

“A quiz is not, generally speaking, journalism, and it’s far from a new form.”

While this is a technically true statement, in my opinion, these quizzes are noteworthy evolution for BuzzFeed because it has the potential to link the two BuzzFeeds together in a new an interesting way. For the uninitiated, BuzzFeed is both a SEO’d-to-death viral timesuck that often reuses content without proper license and a legitimate news-gathering organization with a solid editorial component. Quizzes have the potential to combine these two halves with the slick interactive crack of the quiz yielding worthwhile editorial content. One example is Should You Learn To Code?, a one-question meta-quiz designed to illustrate the way that programming skills have somehow become the silver bullet that will save humanity.

The Shock of the New

So: Are quizzes a new form of journalism? It’s awfully difficult to watch the evolution of a medium as it is happening, but the biggest signifier to me is that the people who are happiest to dismiss quizzes as frivolity are the same people who would be way more interested if BuzzFeed Quizzes had evolved out of the journalism side of the enterprise and not the clickbait side. There’s no $19B shot fired that caused the industry to stop in their tracks, you just gradually started seeing more and more of them on Facebook until there were enough to warrant a think piece.

The Times They Are a-Changin’

If the WhatsApp acquisition is Dylan going electric at Newport, the difference between AOL IM and WhatsApp is the difference between Freewheelin’ Bob Dylan and Highway 61 Revisited: a 5-album stretch that saw Bob Dylan become Bob Dylan, America’s Greatest Songwriter. Now, nearly 50 years later, we can look back and see that plugging in an electric guitar was the logical next step for Dylan. In time, we will be able to see more clearly if $19B for WhatsApp was the right price at the right time, but if nothing else, it at least caused a ceaseless, scatter-shot industry to stop for a moment and consider a single topic.

Periodically Yours,

Bob Sherron