Google(s goog) already has numerous peer-to-peer messaging and communications products, but it may not be opposed to buying another. According to Digital Trends, Google is haggling with breakout mobile messaging star WhatsApp over its acquisition price.
The site’s sources claim WhatsApp is apparently in a strong negotiating position, bargaining up a prospective deal to near $1 billion. Digital Trends only cited an unnamed inside source, so we’ll have to wait to see if anything comes of it.
WhatsApp tried to quashed that rumor pretty quickly. Speaking to AllThingsD late Monday, WhatsApp business development head Neeraj Arora said the messaging company is not in any sales discussions with Google.
Why would Google want WhatsApp? Well, it probably doesn’t need the technology. The company has already built cross-platform communications apps that provide the same intrinsic service as WhatsApp and other mobile over-the-top communications apps. But Google has admitted in the past that it’s done a poor job servicing its messaging users, and recently it’s been focusing more attention on the space, merging its Talk, Messenger and Hangouts apps into a single service.
But in the fast-paced world of peer-to-peer communications, the spoils go to those who build the biggest network. Google has got to be impressed by just how big WhatsApp has gotten in the last few years. WhatsApp doesn’t release specific numbers, but in November, App Annie found that WhatsApp was the top paid in 119 countries — including the U.S. — in Apple’s iTunes App Store. WhatsApp Messenger has also racked up more than 100 million Android installs. What makes WhatsApp even more intriguing is that it charges by the download (though the fee is only 99 cents) — it’s growing by leaps in bounds in a market where the software typically comes free.
If Google is interested in WhatsApp, it could be making the same calculation as Facebook(s fb) when it bought Instagram for $1 billion. While Facebook could have developed its own image-filter and sharing app, Instagram was already well on its way to becoming the dominant photo-based social network on mobile. Google may not want to risk WhatsApp eating its lunch in the exploding OTT mobile messaging market — or worse, see it bought by a competitor.
This post was updated on Tuesday at 10:30 AM, adding comments WhatsApp VP Neeraj Arora’s comments to AllThingsD.