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updated: 2/24/2014 7:30 AM

Russian Zuckerberg gets boost from Facebook ceo's Wwhatsapp deal

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Bloomberg News

After Facebook Inc. announced last week that it's buying WhatsApp for $19 billion, a competing messaging application backed by Pavel Durov, creator of Russia's largest social network, saw the number of people signing up to use the service quadruple.

Durov's Telegram app is seeing as many as 4.95 million people signing up each day since Facebook made its move for WhatsApp. By comparison, WhatsApp is growing by 1 million a day.

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Facebook's deal and Rakuten Inc.'s purchase of Viber this month have put the spotlight on the mobile-messaging industry. WhatsApp fans are airing their concerns across the Web that Facebook will somehow compromise the messaging service. While Facebook chief Mark Zuckerberg has promised autonomy for WhatsApp, when it comes to private conversations, any concern can help a competitor. Even before the sale, Durov cultivated Telegram's reputation as a safe, secure place to converse.

"People should have a tool that will never sell them out," Durov wrote in a Telegram message. "The world needs more projects that are not money-driven. No investors, no sellouts, no IPOs. We need more projects like Wikipedia."

Telegram's momentum accelerated over the weekend. It added 1.8 million new users on Saturday and 4.95 million on Sunday, according to the app's Twitter account. Durov said Telegram is growing in Germany, the Netherlands, Spain and throughout Latin America -- regions Zuckerberg touted as being among WhatsApp's strongest. The increased attention resulted in brief outages over the weekend, not unlike those experienced by WhatsApp after the Facebook news.

Social Networking

Telegram is adding users faster than WhatsApp in some countries and was the No. 1 downloaded social networking app in the AppStore in 56 countries on Monday, according to research firm App Annie.

In the days following the Facebook tie-up, Telegram surpassed WhatsApp as the top-downloaded app in Austria, Argentina, Chile, Costa Rica, Germany, Ghana, Mexico, and the Netherlands, data from App Annie showed. Telegram has more than 10 million registered users, 6 million of whom open the app daily, Durov said last week. Still, WhatsApp is much larger, with 450 million monthly and 320 million daily active users.

The frenzy around the WhatsApp deal hasn't helped every messaging app in the same way as Telegram or even BlackBerry Ltd., which saw its shares rise on optimism for the value of its BBM messaging service. Sam Min, an analyst at Morgan Stanley, wrote in a note that the acquisition reduces possible overseas user growth at Japan-based communication company Line, especially in the U.S.

Value Worry

Tencent Holdings Ltd.'s stock fell 2.5 percent in Hong Kong after the WhatsApp acquisition as investors worried about the value of its WeChat messaging service.

Durov isn't focused on a possible sale for Telegram. The app is run by a nonprofit entity he helped set up in Berlin, where Durov is currently spending his time. The VKontakte social network founder said Telegram won't "ever" be for sale because he doesn't need the money, and neither do his employees.

"They have mighty salaries, but they are driven by the idea behind the project," Durov wrote. "With my current lifestyle, I can live a thousand lives without earning another cent."

--With assistance from Elco van Groningen in Amsterdam and Sarah Gill in Sydney. Editors: Mark Beech, Robert Valpuesta

To contact the reporter on this story: Mark Milian in San Francisco at mmilianbloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11bloomberg.net

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