Facebook - WhatsApp Acquisition
ByMohit SrivastavaMohammed SaquibAkash Mahamana
Jan KoumCEO of WhatsApp
Mark ZuckerbergCEO of Facebook
Acquisition
A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both.
Facebook recent acquisitions• Instagram in 2012 worth $1 billion• SnapTu in 2011 worth $70 million
Founded Feb 24 2009
Founder Jan Koum
Stable Release iOS – Version 2.11.7
Windows – 2.11.356.0
Blackberry – 2.11.529
Android – 2.11.152
Operating System iOS, Android, Blackberry, Nokia Series 40, Symbian, Windows, Nokia Asha
License Proprietary
Founded Feb 4 2004
Founder Mark Zuckerberg, Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, Chris Hughes
Revenue US$7.872 billion
Operating income US$2.804 billion
Net income US$1.5 billion
Users 1.23 billion (monthly active)
Value of the Deal
• WhatsApp is being Acquired for $19 billion
• It includes - USD 4 billion in cash
- USD 12 billion worth of Facebook shares - USD 3 billion in restricted stock units
• Jan Koum to join board of directors of facebook
Why Acquisition• MAU (monthly active users) will ramp up to 1 billion by 2019
• Gives it additional leverage over Twitter in the battle for more direct messaging market share.
• WhatsApp’s function will make it a near-essential add-on to smartphones, and this—combined with smartphone user growth as well as user behaviour that’s shifting more and more towards mobie.
• This will help Facebook to diversify its revenue sources away from
the U.S.
SWOT Analysis
Strengths• Loyal customers• Market share leadership• Group Chat• Avaialable for all platforms• Diversify• Free voice calls
Weakness• Not diversified, because other applications offers the same
service and also function as social media• To access the account can only be paid by credit card only• Only works with a data plan or wifi
Oppurtunities• Continued development of technology platforms• Advanced technology• Recognized application• Modernization of people• Increased demand for smartphones
Threats• Competitors like Wechat, Viber, Tango, Skype, Line• Product substitution• Similar applications and free
• WhatsApp to add voice call to its product in second half of this year.
• Two privacy groups filed a complaint with the Federal Trade Commission to block Facebook's $19 billion acquisition of messaging service WhatsApp. The groups want Facebook to provide more insight into how it intends to use data from the app's 450 million users.
Present Status
http:/ /www.insidefacebook.com/2014/02/25/what-others-are-saying-about-facebooks-acquisi t ion-of-whatsapp/
http:/ /www.huff ingtonpost.com/quora/why-did-facebook-acquire_b_4875055.html
http:/ / f inance.yahoo.com/news/must-know-facebook-acquires-whatsapp-162740629.html
http:/ /www.informationweek.com/software/social / facebooks-whatsapp-deal-under-fi re/d/d-id/1114183
http:/ /www.forbes.com/si tes/adamhartung/2014/02/24/zuckerbergs-3-smart- leadership-lessons-from-facebook-buying-whatsapp/
http:/ /edi t ion.cnn.com/2014/02/21/opinion/wolf-facebook-whatsapp/ http:/ / indianexpress.com/art ic le/business/world-market/facebook-to-acquire-
whatsapp-for-usd-19-bi l l ion-in-cash-and-stock-deal/
http:/ /sequoiacapital . tumblr.com/post/77211282835/four-numbers-that-explain-why-facebook-acquired
http:/ /marketreal ist .com/2014/02/facebook-acquires-whatsapp-19-bi l l ion / http:/ /
t imesofindia. indiat imes.com/tech/tech-news/software-services/WhatsApps-f irst-new-feature-under-Facebook-Voice-cal ls/art ic leshow/30951210.cms
Reference
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