CHAPTER -1

INTRODUCTION
1.1 Profile Organisation/Company:

WhatsApp Messenger is a proprietary, cross-platform instant messaging subscription service for

smartphones with internet access. In addition to text messaging, users can send each other
images, video, and audio media messages. The client software is available for Google Android,
BlackBerry OS, BlackBerry 10, Apple iOS, Nokia Series 40, Symbian S60, Nokia Asha platform
and Microsoft Windows Phone. WhatsApp Inc. was founded in 2009 by American Brian Acton
and Ukrainian Jan Koum (also the CEO), both former employees of Yahoo!, and is based in
Mountain View, Santa Clara County, California.

WhatsApp just surpassed 300 million users worldwide.

In the last four months alone, the mobile messaging app has acquired 100 million users. Users
are also now sending 11 billion messages per day, up from 8 million daily in April.
WhatsApp has recently made a concerted effort to attract new users from emerging markets. For
example, it has offered residents in Southeast Asia an option to pay a small fee for a data-light
version. This allows low-income mobile users to circumvent monthly carrier data fees.
The app is free on most platforms, but charges users 99 cents after one year of use. This business
model draws consumers in. The fact that there's no distracting ads helps WhatsApp retain users.
WhatsApp founders have famously said they're anti-ads and will never include them in the app.
WhatsApp has overtaken China's immensely popular WeChat, which has an impressive 300
million registered users but only about 195 million that are active. It is also ahead of Line (200
million users), Viber (200 million), and even Skype (280 million).
The large user numbers across services are a clear signal of the overall popularity of OTT (over-
the-top) messaging (messaging that goes over the Internet via data connections rather than
carrier-controlled networks), and its staying power. OTT messaging threatens cell carriers, who
lose voice and text revenue, and social networks like Facebook which have not been able to
maintain control of the messaging market.

WhatsApp now has 400 million monthly active users, or people who use the app at least once in
a month, according to a Dec. 19 company announcement. Facebook, Twitter, and other platforms
really need to watch out, or they may see a huge part of their user bases spend more and more
time on WhatsApp - which offers a far less cluttered and ad-free environment
WhatsApp's closest competitors are from Asia: China-based WeChat and Japan-based LINE,
which we estimate ended November at 297 million and 186 million MAUs, respectively.

For further confirmation of WhatsApp's new dominance, check out this November 2013 data on
Android users :

BUSINESS OVERVIEW:

WhatsApp, Inc. developed and sells a messaging service app called "WhatsApp." WhatsApp is a
cross-platform mobile messaging app for use on Blackberry, Android, iPhone, or Windows
Phone that utilizes the messenger's data plan instead of text message allowance. To work,
WhatsApp requires that both the message sender and receiver utilize the application, which
makes for a kind of inherently viral service over which billions of messages are sent each day.

WhatsApp is one of the top revenue generating apps in both iTunes and Google Play. The service
is popular among younger people who try to limit the cost of their mobile plans by eliminating
extra features such as unlimited texting, but may still retain a data plan. The app is also ideal for
people with friends in various countries as international text messages can be expensive.
Additionally, the app's group-chat experience, which can put dozens of persons with different
phone operating systems into one chat thread.

The WhatsApp give unlimited data (Internet) usage for WhatsApp while roaming in more than
50 countries.

Few are given below:

Afghanistan
Australia
Austria
Bangladesh
Canada
Denmark
 Egypt
France
Germany
Hungary
India
Japan
Malaysia

WhatsApp, a dream come true of talking to a friend sitting oceans apart through radio-waves,
means absolutely free. What used to cost a somewhere between Rs. 5-15 per message was
brought down to being free by online messaging like Way2SMS.
This was still found to be cumbersome by people mainly due the involvement of internet which
required logging or signing in a personal computer or laptop. This is where WhatsApp walked in
to make life easy for Smartphone users. It leveraged on the increasing popularity of the term,
Stay Connected.
Where people wanted staying in touch with their friends and loved ones for as low a price as
possible, WhatsApp removed the price aspect from it. It seems this application builders
leveraged on the growing population of Short message service (SMS) users.

BACKROUND

An invention by two guys with an experience of 20 years at Yahoo! Inc. as per the official
website, WhatsApp stirred hard the broth BlackBerry (BB) had tried to, but could only cater to
BlackBerry users, in the form of BB Messenger. No wonder, the success of WhatsApp is much
greater (in terms of number of users) compared to BlackBerry Messenger. It is supported by
many platforms Windows, BlackBerry, Android etc. It has even managed to enter the territory
of Apple, which is otherwise difficult to cross for a non-Apple-made application.
From being a multi-purpose, user-friendly, connectivity application to allowing sharing of not
only messages but also images, audio files and videos, WhatsApp is a rage. The reason is pretty
obvious From downloading it to using it, WhatsApp is free!
But then WhatsApp does cost you something. It demands an internet connection, on the
smartphone handset, to be in use. Just out of curiosity, I wonder then why should one not be as
crazy about using G-talk or Yahoo messenger or AOL as well. Some of us must have heard of the
kik application which followed in the footsteps of WhatsApp and was a declared success. Why,
all of these are free too, with the internet connection? That makes them as well equipped as
WhatsApp.

What, then, distinguishes WhatsApp from the other free of cost applications?
It may be any one of the following
The boom of 3G services followed by a fad for the same.
The plethora of cool and funky emoticons offered by WhatsApp.
Adding a friend on WhatsApp is simple. Anyone who possesses this application on his/her
smartphone and is present in your contact list at the same time is connected to you via
WhatsApp.
WhatsApp doesnt require any Sign-in or Log out.
Whats up, the on-going homonym pun, somehow makes it easier for the youth to connect
with WhatsApp (Intelligent naming).
WhatsApp connects with its users in more than one ways Facebook, Blog and Twitter,
riding on the success of social networkings popularity.
There can be a lot more than these. For some, its the ease of clicking the WhatsApp icon,
going to the chat with a friend and seeing when was the last time he/she was seen online on
the app. For others, its the cool way in which one can update his/her status without really
bothering everyone on his/her friend list to become aware of the same by a pop-up in their
respective profile ( A friends status can be known only by going to View profile).
The telecom industry did not take long to realize that Conference call was a much needed
value added service. Hence, accepting the customer demands, WhatsApp too added a
fascinating feature of Group Chat in Feb 2011. Not only is it easy to create a group on
WhatsApp, it is equally easy to quit the group too.

WhatsApp has constantly been adding more and more handsets to its kitty over the time and
informing users of the same through its website and blog.
But fame is a double-edged sword. And so it happens that there has been a rumour taking some
rounds; recently there was a hoax about WhatsApp charging a fee for its usage to the users
whose screen logo did not turn red.
It was on declared on WhatsApps blog and everywhere else on the internet that the apparently
alarming message was a fake one.Whether this was a marketing gimmick by the parent company
or an attempt to kill competition by someone else is for the users to figure out.

IT STRATEGY ON WHATSSAPP
WhatsApp has been a major contributor of 25% decline of SMS in Spain. Chinese We Chat has
over 300 million users. Over 90% of Korean smart phone users use Kakaotalk. These are just a
few examples of the rising trend of the mobile instant messaging (MIM).
Instant messaging as such is not a new thing, but there are certain reasons why it has had its
resurrection now:
Phones are increasingly more about data than talking: In developed countries nearly every
new phone sold is smart phone. Smart phones are increasingly more about being smart than
phone. There is app for that, now also for the basic phone features (talking and texting).

That data is getting faster: New 4G LTE (Long term evolution) phones will enable high-
speed data for mobile phones. This opens new opportunities for what kind of content we can
exchange in MIM platforms.

Facebook is so huge that it is already mass broadcasting : If you are average Facebook user
sending your status update, the odds are that the message will be seen by your family,
friends and colleagues plus countless of people you do not even know about. This is great,
but serves more of peoples need for vanity and instant recognition. The most meaningful
conversations happen with the people you know. Same phenomenon has been also reason
for the success of Path.

There is always need for 1-to-1 communication: Some might argue that Facebook message
does the trick. However the challenge is that Facebook is already flooded with so many
messages, it is not that reliable way to catch people (at least not all of them). Phone has been
relevant for so long because you can be quite certain that your message is received.
Although Facebook has increased the number of friends, it has not really increase the
 number of real friends. The amount of those real friends is limited and many of
interactions with those people we want to keep private.

World is getting smaller : Majority of MIM applications work internationally. The bread and
butter of Telcos profit margins has been charging for international calls and roaming. MIM
applications do not have those international boundaries. You want to communicate with your
friends no matter where they geographically are.

World is getting more visual : Although SMS-messages have been relatively cheap, telcos
are still taking quite big premium with multimedia messages. With MIM applications you
can send whatever data possible and the because of the point 2 the alternatives are actually
increasing all the time. Basic SMS- type of messaging is just the beginning for MIM
applications and there will be probably lots of innovations in what kind of communication
there will be.

Usage of WhatsApp
WhatsApp Messenger is a smartphone messenger available for Android and other smartphones.
WhatsApp uses your 3G or WiFi (when available) to message with friends and family. Switch
from SMS to WhatsApp to send and receive messages, pictures, audio notes, and video
messages. First year FREE! ($0.99 USD/year after)

No Hidden Cost: Once download the application, can use it to chat as much as one want.
Send a million messages a day for free! WhatsApp uses Internet connection: 3G/EDGE or
Wi-Fi when available.
Multimedia: Send Video, Images, and Voice notes to friends and contacts.
Group Chat: Enjoy group conversations with ones contacts.
No International Charges: just like there is no added cost to send an international email,
there is any cost to send WhatsApp messages internationally. Chat with friends all over the
 world as long as they have WhatsApp Messenger installed and avoid those pesky
international SMS costs.
Say no to PINs and Usernames: Why even bother having to remember yet another PIN or
username? WhatsApp works with phone number, just like SMS would, and integrates
flawlessly with existing phone address book.
No need to Login/LogOut: No more confusion about getting logged off from another
computer or device. With push notifications WhatsApp is ALWAYS ON and ALWAYS
CONNECTED.
No need to add buddies: Your contacts who already have WhatsApp Messenger will be
automatically displayed.
Offline Messages: Even if someone miss push notifications or turn off phone, WhatsApp
will save messages offline until retrieve them during the next application use.
And Much More: Share location, Exchange contacts, Custom wallpaper, Custom
notification sounds, Landscape mode, Precise message time stamps, Email chat history,
Broadcast messages and MMS to many contacts at once and much much more!

Whatsapp SWOT Analysis:

Strengths:
Loyal customers
Market share leadership
No need to log
Group Chat
 Allow send videos, pictures, voice notes
You can put profile picture
No need to add friends
No need PIN or user number
Available for all platforms

Weaknesses:
Not diversified
Weak distribution network
To access the account can only be paid by credit card only
Only works with a data plan or wi - fi

Opportunities:
Online
Advanced technology
Recognized application
Modernization of people
Increased demand for smart phones

Threats:
Competition
Product substitution
Similar applications and free

1.2 About the industry

Social media industry came into existence about 10 years ago when chat messengers that allowed
people to communicate and share content with each other surfaced on the internet. Now, the
industry houses Facebook and Twitter under its umbrella. The popularity of these platforms has
caused the advertisement industry to focus on strategically placing ads on these platforms, which
has changed the media industry.

Industry Size:
~$10.7 billion

Social networking has evolved from being a mere platform to bring together people who share
activities, interests, real-life connections, or backgrounds. Companies today are using social
networking sites such as Twitter and Facebook to build brand images, expand client base, recruit
potential employees, and engage with consumers.

The popularity of social networking sites depends on and varies by the level of usage among
different demographics and in different countries. The research report compares the most popular
social networking sites, reviews them on the basis of active account usage, number of user
accounts, and frequency, and offers a summary on the latest trends that govern the social
networking market.

Details on which is the most popular social networking site worldwide, fastest growing network,
and use of social network by different demographics are covered by the report. In addition, the
report also offers a look at the leading players in the social networking market, their features,
product strengths and weaknesses, business strategies, market size and share, regional breakout,
and forecasts through 2017.

Overview of the Social Networking Market

As of October 2014, Facebook had an estimated 1.36 billion active monthly users. Market
analysts, however, have indicated that although Facebook continues to be the top-ranking social
networking site in 2015, it is no longer growing at the pace it was a couple of years ago. With a
figure rounding off at 343 million, Google+ in 2013 became the social networking site with the
second highest number of monthly users. Facebook, however, has managed to retain its surging
revenues even today thanks to the introduction of video calls and the acquisition of WhatsApp in
February last year.

Social networking sites have opened up a world of opportunities for both enterprises and
consumers. Vendors in the enterprise social networking space such as Broadvision, Atlassian,
Jive, IBM, Salesforce, Microsoft, Telligent, Social Text, and Yammer, and players in the
consumer social networking sphere such as Facebook, Badoo, LinkedIn, Google+, Qzone,
MySpace, Yelp, and Twitter have not only presented a platform to engage users and expand their
services, but also turned out to be one of the most promising methods of revenue generation.
Opportunities for content management companies, social media advertizing agencies, social
media managers, and social media strategists have received a boost thanks to the global growth
of the social networking market.

Growing penetration of internet connectivity, economic growth and rise in disposable incomes in
emerging economies, change in lifestyle, proliferation of smartphones, development of the e-
commerce industry, and transition from texted-based content to image-centric solutions has
fueled the growth of the social networking market.

Social media are computer-mediated tools that allow people or companies to create, share, or
exchange information, career interests, ideas, and pictures/videos in virtual
communities and networks. Social media is defined as "a group of Internet-based applications
that build on the ideological and technological foundations of Web 2.0, and that allow the
creation and exchange of user-generated content." Furthermore, social media depend on mobile
and web-based technologies to create highly interactive platforms through which individuals and
communities share, co-create, discuss, and modify user-generated content. They introduce
substantial and pervasive changes to communication between businesses, organizations,
communities, and individuals. These changes are the focus of the emerging field
oftechnoself studies. Social media differ from traditional or industrial media in many ways,
including quality, reach, frequency, usability, immediacy, and permanence. Social media operate
in a dialogic transmission system (many sources to many receivers). This is in contrast to
traditional media that operates under a monologic transmission model (one source to many
receivers).

"Social media has been broadly defined to refer to 'the many relatively inexpensive and widely
accessible electronic tools that enable anyone to publish and access information, collaborate on a
common effort, or build relationships.'"

Mobile social media and business potential

Although traditional social media offer a variety of opportunities for companies in a wide range
of business sectors, economic-sector mobile social-media makes use of the location- and time-
sensitive aspects of social media in order to engage in marketing research, communication, sales
promotions/discounts, and relationship development/loyalty programs.

Marketing research: Mobile social media applications offer data about offline consumer
movements at a level of detail heretofore limited to online companies. Any firm can know
the exact time at which a customer entered one of its outlets, as well as comments made
during the visit.

Communication: Mobile social media communication takes two forms: company-to-

consumer (in which a company may establish a connection to a consumer based on its
location and provide reviews about locations nearby) and user-generated content. For
example, McDonald's offered $5 and $10 gift-cards to 100 users randomly selected among
those checking in at one of its restaurants. This promotion increased check-ins by 33%
(from 2,146 to 2,865), resulted in over 50 articles and blog posts, and prompted several
hundred thousand news feeds and Twitter messages.
 Sales promotions and discounts: Although customers have had to use printed coupons in
the past, mobile social media allows companies to tailor promotions to specific users at
specific times. For example, when launching its California-Cancun service, Virgin America
offered users who checked in through Loop at one of three designated Border Grill taco
trucks in San Francisco and Los Angeles between 11 a.m. and 3 p.m. on August 31, 2010,
two tacos for $1 and two flights to Mexico for the price of one.

Relationship development and loyalty programs: In order to increase long-term

relationships with customers, companies can construct loyalty programs that allow
customers who check-in regularly at a location to earn discounts or perks. For example,
American Eagle Outfitters remunerates such customers with a tiered 10%, 15%, or 20%
discount on their total purchase.

e-Commerce: Mobile social media applications such as Amazon.com and Pinterest have
started to influence an upward trend in the popularity and accessibility of e-commerce, or
online purchases
 CHAPTER 2
LITERATURE REVIEW
2.1 Literature Review

2.1.1. Baym, Zhang, and Lin (2004)

All the studies reviewed for this review of literature used samples whose participants were
college students. College students use of social media is happening in rapidly growing amounts
as new technology becomes available. Computer-mediated communication allows young adults
to interact over social media with family and friends. Few studies have been conducted to
examine how using social media and other computer-mediated communication affects
communication skills.

2.1.2. Boyd and Ellison (2007)

They defined social network sites as public web-based services that allow users to develop a
personal profile, identify other users (friends) with whom they have a connection, read and
react to postings made by other users on the site, and send and receive messages either privately
or publicly. Individuals may choose to send private messages, write on other users walls,
organize social activities, and keep informed about other users daily activities. However, users
can limit themselves on what information they would like to share publicly with others. Some
items they may choose to include are: pictures, favorite books and movies, birthday, relationship
status, and location.

2.1.3. Tufekci (2008)

They studied social interactions of college students across all media. Their results indicated that
64% still prefer face-to-face interaction, 18.4% prefer the telephone, and only 16.1% prefer the
internet for making social contacts. The internet interactions reported showed that e-mail was by
far the most dominant form of contact, followed by chat and instant-messaging. Of the 51
participants in the study, 49 reported conducting their social life contacts through at least two,
and often three, methods on any given day.

2.1.4.Urista, Dong, & Day (2009)

Social network sites help fulfill communication needs and wants. It is a convenient method of
communication and provides the ability to stay connected with friends and family, but on the
users own rate and time. Users can manage their interactions within their own schedule by
choosing when they want to read and respond. The internet communication is a solitary activity
usually done alone. However, it is efficient because it is a one-to-many method of
communication that allows users to quickly spread information.

2.1.5. Lenhart, Purcell, Smith, & Zickuhr (2010)

According to their study the amount of time spent daily on social network sites varied greatly.
However, an analysis of the data indicated most participants spent approximately 30 minutes a
day socializing, mostly during the evening hours between 9 p.m. to 12 a.m. found that the quality
and quantity of interactions in other media were not threatened by social internet sites. Online
social interaction is only part of the total multimedia social relationship, not an entity in itself.
Local social relationships are most likely to use face-to-face contacts and least likely to use the
internet. Long distance relationships are maintained with the internet about as often as with the
telephone. Internet interactions were perceived as high in quality as and only slightly lower than
face-to-face conversations and telephone calls. Educational experience of men and women
seemed to play a factor in social media use as well. Men and women are more likely to use social
network sites frequently if they are into college experience. The use of social media by students
for academic practice is surpassed by its use for social engagement, direct communications, and
relationship building.