They had fantastic product-market fit.

As dleslie and that_guy_iain have mentioned, it was expensive to send an SMS text back then, especially in Europe when your friends have different country codes. So WhatsApp was a free alternative that tapped the unmet need for millions.

And signing up with only a phone number seems like a nobrainer nowadays, but the mindset of the time was still email + password. Sure, Microsoft could have launched a competitor, but they would most certainly require you to use an MSN account, thus adding friction to adoption.

That's a totally different question. A larger company such as Microsoft could have easily grabbed the market first, but they didn't.

This comment flies in the face of actual history. While your point about Microsoft may be right (who knows with how they’ve ruined their messaging platforms?) it certainly doesn’t hold true for iMessage which came out in roughly the same timeframe as WhatsApp (2011 vs 2009).

iMessage still has yet to come to other platforms, and at least for a few years after the iPhone's launch, many people viewed it as a luxury product and were unlikely to spend the money to get one compared to cheaper phones (which WhatsApp supported).