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TheStreet Open House

WhatsApp Deal a Kik for Messaging Startups

Stocks in this article: FB YHOO GOOG ZNGA QCOM UBS

NEW YORK (The Deal) -- Facebook's  (FB - Get Report) blockbuster, $19 billion purchase of WhatsApp has focused attention on the increased value of mobile messaging.

Buying WhatsApp has both offensive and defensive elements, as UBS  (UBS) analyst Eric Sheridan noted. Facebook gains a popular messaging platform with more than 450 million users per month, which Facebook founder and CEO Mark Zuckerberg said he expects to eventually hit 1 billion.

Zuckerberg also keeps WhatsApp's horde of subscribers out of the hands of competitors such as Yahoo! (YHOO - Get Report) or Google (GOOG).

A range of global upstarts provide variations of mobile messaging over the Internet.

Hong Kong-based Tencent operates messaging apps WeChat and Weixin, the latter focused on the Chinese market. Subscribers can make audio and video calls, and exchange photos.

Combined, WeChat and Weixin had more than 270 million users at the close of the third quarter, growing nearly 125% from the same period a year earlier. Tencent, which trades on the Hong Kong Stock Exchange, reports fourth-quarter numbers on March 19.

Dutch messaging company Nimbuzz has 120 million users and gains 4.5 million per month, according to its website. The company has backing from Mangrove Capital Partners and South African media group Naspers. The company offers free voice and video calls over its broadband app, but charges for calls to phones.

Line Corp. of Tokyo has 340 million users for its free call and messaging app and said it expects to reach 500 million users this year. "Line has really been pushing games," SNL Kagan analyst Seth Shafer said. Within the games, users can purchase extra lives, or turns.

Line also sells stickers that subscribers use to adorn messages. Some have featured star soccer players in Mexico.

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