Once labelled the “Skype Killer,” mobile and desktop app Viber differs from its rivals Skype and WhatsApp in its business model.
280 million people use the free messaging and voice-over-internet app Viber, compared to the 430 million who use WhatsApp and Skype’s 1 billion users. Its strongest market is in Vietnam and the Philippines.
This week, we take a closer look at Viber, an app that has never been funded through advertising, and was recently bought for $900 million by Japan’s largest e-commerce company, Rakuten, who might drastically change the look of Viber in the coming months.
Viber was initially launched for iPhone in late 2010, directly competing with Skype. It was founded and co-owned by four Israeli partners: Talmon Marco, Igor Megzinik, Sani Maroli and Ofer Smocha, who are friends from the Israel Defense Forces. Marco and Megzinik are also co-founders of the P2P media and file-sharing client iMesh.
In May 2011, the first version for Android was released, but it was restricted and only available to 50,000 users. The first unrestricted version was not released until July 19, 2012, after Viber for BlackBerry and Windows Phone devices was launched on May 8, 2012. When Viber reached 90 million users, group messaging service and HD Voice engine were added to both Android and iPhone applications. On the same day, July 24, 2012, applications for Nokia’s Series 40, Symbian and Samsung’s Bada platform were announced. As part of exclusive partnership with Nokia, HD quality phone calls and hold group-messaging sessions were made available for Windows phone in September the same year, and was officially released for all Windows Phone 8 devices on April 2, 2013.
In May 2013, Viber went further than other mobile message devices, and launched a desktop app for OS X and Windows operating systems, again competing directly with Skype. In August 2013, Viber for Linux was released as a public beta.
As of December 2013, Viber officially launched Viber Out, allowing all users to reach people without the Viber app, by calling mobile and landline numbers. Viber Out was originally released in November to help Typhoon Haiyan victims in the Philippines connect with their loved ones. No update is needed for the feature.
The technology/Features & Functionality
Viber uses a simple mobile interface and doesn’t require a login to receive text messages and images as well as making voice calls through both 3G/4G and Wi-Fi networks. The software is now available for Mac OS, Android, BlackBerry OS, iOS, Series 40, Symbian, Bada, Windows Phone, and Microsoft Windows.
The functionality varies from platform to platform and iOS and Android are the first to receive new features. When installing the app, it creates a user account using one’s phone number as username. Viber then synchronizes with the phone’s address book, so users do not need to add contacts in a separate book. Since all users are registered with their phone number, the software returns all Viber users among one’s contacts.
Viber is currently available in 30 languages. Concerns about the application’s Israeli origin have been raised by many bloggers in the Arab world, partly regarding the fact that the app saves a copy of each user’s address book on Viber’s servers, unlike other services which just scan users’ contacts. Mr Marco has spoken against government surveillance, and claimed that Viber refuses to disclose the contents of conversations to state authorities. “We never took a single dollar from the state of Israel, we are not even incorporated in Israel. We maintain a research and development center in Israel and that’s it.”
Viber Media is a Las Vegas and Cyprus-registered company, with head offices in Israel, and its development centers in Cyprus and Belarus, to lower labour-costs.
For the first couple of years, the company did not generate revenues, and was funded only by individual investors, who Marco has described as “friends and family”. As of May 2013, $20m had been invested in the company. That has set the service apart from other start-ups born in Israel, such as the mapping service Waze, which was bought by Google for about $1 billion.
Some funds were later generated through downloadable stickers (a market also targeted by rival service Line), charging for calls to non-Viber numbers. Revenues were just $1.5m last year – but their ‘no advertising’ policy differentiates Viber from Skype, which under Microsoft displays adverts during audio calls.
So what is the future of Viber? Rakuten might very well change the strategy either towards e-commerce, games or advertising campaigns, to compete with Line, Kakao Talk, and WeChat in Southeast Asia.