As you know, Facebook acquired a mobile messaging startup called WhatsApp for an eye-popping $19 billion price tag.
Some folks say it was a smart move — an efficient way to capture a huge global audience and ride the mobile “mega-trend.” Others say it reeks of desperation, an acknowledgement that youngsters are storming the exits at Facebook.
Whichever camp you’re in, one thing is clear: As an investor, it’s a wake-up call to focus on the mobile mega-trend. Let’s take a look at three ways to ride this mobile wave for profits.
1. Go Short Legacy Communications
The first way to play this mega-trend is to short public telco stocks.
According to research group Ovum, until recently, the telcos have been sitting on a $120 billion market for text messaging.
Last year, they lost $32 billion in text messaging revenue due to new mobile competitors. And by 2016, they’ll lose $54 billion.
2. Go Long, Facebook
Another way to play the mobile mega-trend is to buy shares of Facebook.
Aggressive CEOs like Mark Zuckerberg can make their stocks shine.
Zuckerberg didn’t ignore the warning signs that he was falling behind on a mega-trend, and he didn’t balk at a high price.
He also kept WhatsApp from falling into the hands of Google, a major competitor. (According to CNN, Google offered to buy WhatsApp for $10 billion.)
Google’s mobile operating system, Android, comes pre-installed on 80% of the world’s smartphones. Given that penetration rate, perhaps Facebook was concerned about letting Google control one of the globe’s most popular mobile messaging systems.
Zuckerberg is clearly taking the long view. As Jeff Bezos has proven with Amazon, that can pay off handsomely for shareholders.
3. Invest in Mobile Startups
The last way to play this mega-trend is to invest in early-stage mobile companies.
Mobile is the new battleground, and this is where the biggest acquisitions are happening — not just WhatsApp, but Google’s $1 billion purchase of mobile maps company Waze and Facebook’s $1 billion acquisition of mobile photo app Instagram.
There are a bunch of mobile startups raising funds on equity crowdfunding sites. Here are a few to explore:
Ansa is a secure messaging service that lets people send “disappearing” messages to friends — the messages either disappear after seconds or the sender can “take back” messages once they’ve been read. One of their competitors, Snapchat, recently rejected a $3 billion offer from Facebook.
Medigram is a HIPAA-compliant group messaging platform offering secure communications for health care professionals. Their current investors include Andreessen Horowitz (early backers of Facebook, Twitter, Pinterest, etc.) and Yuri Milner (backer of Facebook, Twitter, Spotify, etc.).
SilverPush is a platform for mobile advertising. They have a proprietary technology that helps advertisers identify and discover their users when they’re on mobile devices. Their investors include super-angel Dave McClure’s 500 Startups.
The next billion Internet users (actually, the next 5 billion) will come from places like Africa and India — and their first experience with the Web will be on MOBILE.
So if you’re an investor, be sure to focus on this mobile mega-trend!
Ed. Note: In today’s issue of Tomorrow in Review, readers were given a chance to learn about an incredible investment opportunity in the crowdfunding space, that takes full advantage of Matt’s expertise. The possible ROI for these investors is simply off the charts! You can start getting great opportunities just like this, by signing up for the FREE Tomorrow in Review email edition, right here.