Saturday 24 March 2018

Viber boss refuses to be on message over Facebook supremacy

For many Irish smartphone users, Viber was the original free call service. Today, the company is doubling down on its business-friendly features and is determined not to let Facebook, WhatsApp and Snapchat run away with the market. Our technology editor spoke to chief operating officer Michael Shmilov

Michael Shmilov the chief operating officer of messaging app Viber which is aiming for 1bn users
Michael Shmilov the chief operating officer of messaging app Viber which is aiming for 1bn users
Adrian Weckler

Adrian Weckler

Facebook, WhatsApp and Snapchat have won the messaging war and the rest can go home. Right?

Not so fast, says Viber's chief operating officer Michael Shmilov. The Israeli-born voice and messaging service, which has over a million users in Ireland, says that it's growing aggressively and has no intention of ceding the texting market to Mark Zuckerberg or anyone else.

"We have passed 800m registered users and I definitely expect that to get to one billion by the end of 2017," he tells the Irish Independent. "We're growing very steadily."

In Ireland, around 400,000 people use Viber every day. It's the fourth-most used voice and messaging service here (behind Facebook, WhatsApp and Snapchat) according to Ipsos MRBI. While it hasn't matched the local growth of Facebook's services and Snapchat (both of which have risen 50pc here over the last two years), its penetration has remained steady with two in five adults still operating a Viber account.

But in other parts of the world, Viber is growing quickly.

"We're actually the biggest service in some Asian countries, including the Philippines, Vietnam, Myanmar and others," he says.

"Viber is second to Facebook in a large part of the world. Russia is our top country by size, then Ukraine, the Balkans, Greece and a lot of southern European countries."

In all, the service has 260 million active users, more than all but two global telecom companies and roughly the same as Snapchat. Now owned by Japan's Rakuten, Viber sees little by way of easing up. To this end, it recently introduced a couple of new features aimed at getting businesses involved more. In the same way that Facebook and Snapchat are courting commercial organisations' advertisers, Viber is now giving companies more tools to operate their own channels on the service.

"We're giving business the ability get onto Viber and then to promote themselves when they're there," he says. "Things like sponsored stickers. It opens the door for us to become a much bigger business. To date, the vast majority of monetisation on Viber has been in B2C [business to consumer] activities, such as gaming.

"What's starting to happen now is more B2B2C [business to business to consumer]. You can expect more building blocks from us in ecommerce and payments In this area, there is a big opportunity for us. The scale is very significant."

But is Viber living on borrowed time? Its penetration in the countries that Shmilov mentions is impressive. But is that simply because it got an early advantage? How long can it hold out against the increasingly indomitable, super-rich Facebook empire of Messenger, WhatsApp and Instagram?

The answer, he says, lies in acknowledging what competitors do well and then developing intelligent extra services for Viber itself. For example, the service has recently started to include disappearing messages after the feature proved to be so popular with Snapchat users.

"We definitely look at the product evolutions," he says. "We recently launched a 'delete message' function. So if you send a photo to the wrong conversation, you can now actually pull it back. Then we launched a secret, or hidden, chat that you can hide from your list.

"We also had a hackathon and from that we released a product called Wink. It's a standalone application which, once it's sent, will disappear as soon as it's seen."

Does this mean that Snapchat is effectively setting the tempo at present?

"I don't want to say that we're going to do the same things [as Snapchat]. We have different ideas for things that are more suitable for our audience. You can definitely expect more things within our core messaging around more privacy and control for users."

One problem that 'over the top' services such as Viber, Skype and others have faced in their voice call features is the issue of guaranteed quality. Most people who use such services are familiar with lags in voice times, patchy reception and an overall sketchier experience. This largely comes down to investment in network optimisation, which operators themselves spend a lot of money on for their own voice services but which companies like Viber have little control over. Still, Shmilov insists that the quality of voice calls is improving.

"Our voice quality is dramatically better now than at launch," he says. "But it's also dramatically better than it was this time last year. We can see that reflected in the amount of people using it, the number of calls they make and the length of the call they make. These metrics are going dramatically up."

The stats suggest that voice makes up an important part of Viber's offering. Shmilov says that 75pc of Viber users make calls on a monthly basis, while 85pc use its messaging services.

"We're definitely continuing to invest in voice," he says. "A lot of that traffic is coming from the continued growth of smartphones as there are still quite a lot of people getting smartphones and data for the first time and in many countries, Viber is now seen as a core service. Another factor is the cost of calls on traditional networks."

This competition with established telecoms networks has sometimes brought Viber into a heated public debate over the future of funding such networks.

Traditional operators have long complained that 'over the top' services are getting a free ride on the back of their infrastructure investment. Some international operators have even tried to block services such as Viber, claiming that such services are gradually putting them out of business.

"There are ups and downs in our relationship with telecoms companies," says Shmilov. "But at the end of the day, there are multiple partnerships with telcos in place and they use us, too. We have telcos as public chats on Viber in all of our top markets. So I would say it's about co-operation.

"Yes, it's a business threat to telephones in their original format. But that's something that many telcos don't really focus on monetising much any more in the western world. Today, it's all about data infrastructure and the brand they provide for businesses."

The future for Viber, says Shmilov, is to deepen existing products rather than tacking on completely new ones.

"If you're good at something, keep doing it," he says. "There's a difference between evolving your current offering and trying to add completely new services.

"We find that people respond better to evolving one of your core functionalities. For us, that has to be attached to the reason someone first came to Viber. Our users came to connect with friends and families, to do it freely and securely and every time we improve something, we see tremendous impact on engagement.

"On the other hand, whenever we add something on the side such as games, commercially it might do well for us but the impact tends to be lower. So if you find a way to add features that are native, there's definitely something there."

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