Chat major's Asian rivals drop after buyout

WeChat owner Tencent Holdings dips 3% in Hong Kong while Naver Corp slumps 8% in Seoul

Instant-messaging service operators that compete with WhatsApp fell in Asia trading on Thursday after Facebook said it would pay as much as $19 billion for the start-up.

Tencent Holdings, the Shenzhen, China-based owner of WeChat, declined 3.1 per cent in Hong Kong trading. Naver Corp, the owner of Line, slumped 8.1 per cent in Seoul for its biggest decline since December 2011. Rakuten, which paid $900 million last week for messaging app Viber, fell 4.8 per cent in Tokyo. Facebook said it was paying $12 billion in stock, $4 billion in cash and $3 billion in restricted shares for WhatsApp, which lets users send messages through its services on mobile devices with different operating systems.

Facebook CEO Mark Zuckerberg said he expected the service to reach more than one billion people in the next few years, increasing the challenges to competing Asia-based services.

"It would definitely have some impact on Tencent's global business, especially now that WhatsApp has a strong platform that they can tie up with," said John Choi, an analyst at Daiwa Securities Group in Hong Kong. "For WeChat, we could see more competition kicking in for their Southeast Asian, US and South America markets."

WeChat, Line
WeChat, Line and Viber each say they have around 300 million registered users. WhatsApp has more than 450 million monthly users. WhatsApp was the second-most popular app download last year, according to App Annie, an analytics and marketing service. Facebook was No 1, Line was No 6, Viber was No 9, and WeChat was No 10.

"Facebook's rich valuation per user for WhatsApp confirms that instant-messaging apps lead the next internet gold rush," said Praveen Menon, analyst with Bloomberg Industries. "WhatsApp's expansive user growth in a number of international markets may command a premium over niche-local market rivals in Asia."