WhatsApp Vs. BBM Security? Let Google Decide

Feb.27.14 | About: BlackBerry Ltd. (BBRY)

In this article I consider the question of BlackBerry (NASDAQ:BBRY) Messenger vs. WhatsApp mobile messaging security, and the potential impact of the discussion on BlackBerry's valuation and share price in the near and intermediate term.

Which has more security concerns and problems, WhatsApp or BBM?There is quite a bit riding on the answer; some WhatsApp users are evaluating their options in the wake of the acquisition by Facebook (NASDAQ:FB), and if BlackBerry Messenger (BBM) has a distinct advantage in security, this could cause some of the 450M existing WhatsApp users to switch to the more secure option.

To be clear, this article is not an indictment of Facebook's acquisition of WhatsApp. In my opinion the acquisition makes perfect sense, as many younger WhatsApp users - the ones Facebook ostensibly wants to keep in the family and nurture as they age - may not even hear (or care) in the least about the deal. This is especially true in foreign markets, where mobile was already seen as Facebook's gateway to its own user growth, even before the acquisition was announced.


There has been a lot of speculation about what if any impact Facebook's $19B acquisition of WhatsApp may have on the valuation and prospects of BlackBerry. For some it is just one of many other recent catalysts for BlackBerry stock, including the news that Ford (NYSE:F) will be moving to BlackBerry's QNX microkernel-based OS, and that BBM now runs on iOS and Android. For others the development does not materially add to BlackBerry's enterprise value.

Erring conservatively on the low end, a per BBM user value of $10 would add a cool $800M to BlackBerry's enterprise value, based on a rough estimate of $80M active monthly users. This view must, however, be tempered by the fact that BlackBerry's new CEO, John Chen, has not yet laid out a plan for how BBM will be monetized.

But what if WhatsApp users were to actually switch over to BBM in large enough numbers to make a significant difference in BBM's growth rate? After all, WhatsApp's growth rate was no doubt a major factor in its valuation.

A Focus on Security

So what would drive users to switch? Fear of mobile ads will not be the only concern of WhatsApp users, in my opinion. There will also be an increased focus on security, especially among older, more business-savvy professionals. A recent PCWorld article revealed that the German government is warning its population to switch away from WhatsApp due to worries over security. Thilo Weichert, a German data protection commissioner, has concerns that go beyond the issue of how Facebook will treat WhatsApp users' privacy. The article reads, in part:

WhatsApp, for instance, had a major design flaw in its cryptographic implementation that could allow attackers to decrypt intercepted messages. The company hasn't been transparent about how it solves such security problems, Weichert said.

Blackberry, to be fair, is not without security concerns, even though President Obama is not allowed to use anything else (although he says he'd prefer an iPhone).

I had more trouble searching the web to find stories or articles specifically about BBM security problems, although I found one that was notable for its implications for the privacy of BBM users.

But it occurred to me that cherry picking articles and web pages pro and con one product versus another is tedious, anecdotal, and difficult to quantify. You'll never win an argument or prove a point by trading web links to competing viewpoints.

Let's Just Google It

I admit it - I'm a Google junkie! As a high tech marketer, I've used Google for most of my career to uncover things. So it occurred to me to try and use Google to help answer the question at hand - is BBM perceived to be significantly more secure than WhatsApp? If it is, BBM could steal away just enough users to make a difference in its rate of growth in the near term.

On the face of it, it's not such a novel idea to type two things into Google and see which is more popular (or unpopular, as the case may be) based on the number of page results. But raw page result numbers could be deceiving in this case because of the big disparity in numbers of users; more users equals more searches.

So instead of measuring search results themselves, it occurred to me that Google's handy Autocomplete feature might provide some more reliable insight into the bias of the users. Autocomplete is essentially a window into the minds of Google searchers. Simply put, it will automatically fill in the most popular search terms that typically follow an initial entry of text.

I first tried this with the phrase "WhatsApp Security…"

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I then tried it with BBM

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The results are very telling. Whereas Google users interested in WhatsApp security seem primarily focused on "concerns", "issues", and "breaches", BBM searchers more benignly inquire about "questions", "features", and "android". Googlers are clearly worried about WhatsApp security, but the question is, how worried are they?

So I conducted search result numbers comparisons for the following searches:

"[PRODUCT NAME] concerns"

"[PRODUCT NAME] risks"

"[PRODUCT NAME] issues"

"[PRODUCT NAME] holes"

"[PRODUCT NAME] breaches"

I urge you to conduct these searches yourself, substituting WhatsApp and BBM for "[PRODUCT NAME]".

While I was able to quantify a significantly higher number of negative stories and other content for WhatsApp, I could not reliably control for any error introduced by the disparity in user numbers. But when you dive into the actual page results, you'll see what I mean.


I believe the acquisition will give security-conscious WhatsApp users an opportunity to re-evaluate their loyalty to the service, and if they use Google or other search engines to do their homework, their security concerns may be heightened, as will their proclivity to switch to more secure platforms.

Given BBM's reputation for strong security, I believe this will help increase BBM adoption, but more importantly, bolster BBM's reputation as the secure mobile messaging platform of choice. The heightened visibility and positive perception of BBM should increase the enterprise value of BlackBerry itself, thus contributing to the trend of a higher share price in the near and intermediate term.

Facebook, which I am also long, should not, in my opinion, suffer any share price deterioration from this, as new and younger WhatsApp users added in the normal course of business will almost certainly eclipse any user attrition among older, more business-savvy users concerned with security. I'm no mobile advertising expert, but I'd rather have 100 15 to 18-year old users clicking on music ads than 100 Gen-x'ers or even early Millennials clicking on email. BlackBerry might have a different view of this depending on their monetization plans for BBM, and this makes things all the more interesting!

Disclosure: I am long BBRY, FB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Please do your own due diligence before investing.