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Why BlackBerry profits from Facebook buying WhatsApp

News of Facebook's acquisition of WhatsApp helped send shares in BlackBerry soaring. 

By Matthew ShaerCorrespondent / February 21, 2014

Thorsten Heins, CEO of Blackberry, is seen in Toronto on a video link from New York in January as he introduces the BlackBerry Z10 in September of last year. The WhatsApp deal has helped bolster shares in BlackBerry.

Reuters

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This week, Facebook announced it would acquire the messaging service WhatsApp in a cash and stock deal worth $19 billion. That's an incredible amount of money, obviously – there are a handful of countries with smaller GDPs. But analysts have argued that the deal could be worth it for Facebook, especially if the purchase helps expand the social network's footprint into markets where WhatsApp is already extremely popular. 

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So yes, the acquisition is definitely good news for the now insanely wealthy founders of WhatsApp, and it may yet prove lucrative for Facebook, too.

Meanwhile, BlackBerry may also stand to benefit from the move. Yes, BlackBerry. In trading Thursday and Wednesday, shares in BlackBerry, the Canadian company formerly known as Research in Motion, rocketed up as much as nine percent

The reason: Some investors clearly feel that if WhatsApp is worth $19 billion, then BlackBerry's BBM messaging platform might be worth some cash, too. (In the past, BBM was confined to BlackBerry devices, but more recently, as BlackBerry struggles to regain smart phone market share, the company has begun offering the service as a free app for Android and Apple devices.) 

Not so fast, others have cautioned. Writing in the Wall Street Journal, Dan Gallagher pointed out that BBM is "closely tied" to BlackBerry's not-exactly-robust handset business. 

"The company said in late December that about 40 million iOS and Android users registered the application in the 60 days following its launch for those platforms," Mr. Gallagher writes. "But it remains unknown how their usage compares with those on the BlackBerry platform. WhatsApp's value lies in its large customer base straddling all major mobile platforms – with 70 percent of its user base active each day. BlackBerry still needs to show it can keep users engaged outside its home platform base and monetize the service." 

Interested in learning more about what WhatsApp could mean for Facebook? Check out the Monitor's Karis Hustad on some global expansion scenarios. 

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