$22 billion acquisition of Whatsapp by Facebook, it was the biggest acquisition by Facebook in terms of purchase price.

–-What was their motive for this acquisition?

Facebook attempted to buy out other social networking service targeting heavily on teens “Snapchat”, but they failed to do so. Thus Facebook tried to compensate for this by this acquisition of Whatsapp.

Moreover, it was revealed that there is a decrease in number of teen Facebook users. Teenagers are the social cluster of people who are always eager to try something new, thus are the main customer segment of Facebook. However such important their customers’ interests are now shifting to other social networking services, like Whatsapp and Snapchat.

Facebook in fact provides their unique messaging service similar to Whatsapp, but the number of active users are smaller than Whatsapp’s. By taking over Whatsapp, Facebook will be able to easily and efficiently access such group of teenagers who always actively exchange messages everyday.

Whatsapp’s excellent user engagement and rapid growth is dues to their unique application features. Their messaging function is simple though powerful and fast. Also their number one motto is “No ads”. If you purchase a free app, the free app usually comes with all sorts of advertisements. In Whatsapp’s case, they focus heavily on providing a stress-free app by not associating with any of the advertisement companies. This is their focus differentiation, which resulted in their great success.

An app like Whatsapp is a “killer applications” for variety of meanings. Wherever you are or what ever you are doing, this app draws your attention.

The world trend is now shifting more towards to more versatile applications equipped in smart phones rather than websites like Facebook.

I am very interested and curious about how Facebook is going to strive hard to survive such competitive market in the future.

Bibliography

Zolfagharifard, Ellie. “Facebook Completes Its $22 Billion Acquisition of WhatsApp after European Regulators Give the Green Light.” Mail Online. Associated Newspapers, 07 Oct. 2014. Web. 24 Oct. 2014.

“Silicon Valley Mega Deal: Facebook Buys WhatsApp for $19 Billion (Rs 1,14,000 Crore).” TheTechPandacom. N.p., 20 Feb. 2014. Web. 25 Oct. 2014.

Microsoft bought out Nokia, the Finnish smart phone company for €5.44 billion in this April, however there is not a good outcome from it so far.

At the beginning people thought that this acquisition of Nokia is for Microsoft to catch up with the 2 major smart phone enterprises, Apple and Google. Apple has been manufacturing their own hardware by themselves, but outsourcing the devices from a Taiwanese company. Google’s main sales item “Nexsus” series is manufactured by Lenovo in the result of an acquisition of Motorola mobility by Lenovo. Now Google is focusing solely on production of software. Thus both of these enterprises are specializing in one thing rather than trying to cover every thing within their companies in order to achieve a high quality in a main component of their productions. This resulted in a great success in both businesses.

Whereas Microsoft is trying to focus on smart phone business by release of windows phone however their attempt failed due to the lack of progress in other device makers. Before Nokia worked together with Microsoft, their Windows programmed smart phones were like existing Android phones with a little bit of modifications. By using Nokia’s main smart phone platform for the windows phone, they got a bit of increase in sales but it was not innovative enough to make a huge impact on Android or iOS smart phones. This failure to gain popularity resulted in layoffs of Nokia workers.

However, I think without the acquisition of Nokia, the situation now could have been worse for Microsoft. Nokia was not a huge device maker, yet they had an established brand image so it drew some attention from the public. But now Microsoft is trying to shift away from Nokia’s name. This might decrease Microsoft’s share value because Nokia’s brand name is still recognized by consumers all over the world except the US.

Public view of Microsoft is that it is an enterprise that produces goods that are targeting more on other enterprises than the general consumers, thus their company reputation is more of a conservative image. I believe by incorporating different hardware brand, Nokia, they can change such company image. Under Nokia’s brand they can make an innovative production targeting general consumers and at the same time they can use the same technology, human resources ad supply chain they can provide devices targeting enterprise under Microsoft brand name. This new way of bringing business could possibly result them to achieve a great success in both markets.

Bibliography

“Microsoft to Phase out Nokia Name.” BBC News. N.p., 22 Oct. 2014. Web. 23 Oct. 2014.

Johnson, Luke. “Microsoft Completes Nokia Takeover.” – News. N.p., 25 Apr. 2014. Web. 23 Oct. 2014.

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SOUZA, ELSON DE. “Microsoft Compra a Nokia: Entenda O Que Pode Mudar Nos Próximos Anos.” TechTudo. N.p., 3 Sept. 2013. Web. 23 Oct. 2014.

First nations who had been considered as a minority group are now playing an important role in the process of passing BC Hydro’s $8-billion Site C hydroelectric megaproject. They now have a powerful voice against the two levels of government and challenging them so as to take down the project.

Hydroelectric megaproject is considered as the most economic solution to the greenhouse gas emission problems. However there are many problems arise from the construction of the dam. It will significantly damage the ecosystem as well as natural habitat and wild animals inhabit around the area. More importantly, there is going to impair First Nation practices and their finish opportunities resulting in the strong opposition to this hydroelectric project.

B.C government cannot proceed to this project unless they obtain an approval from First nations and establish a partnership with them. To do so, it is necessary for the government to carefully negotiate with first nations because their historical relationships are rather complicated and there is still a conflict remaining between them. Here are some points I think the government should try in order to make obtain the approval from first nations. It is possible that some first nation people are interested in this project rather then objecting against it. Job opportunities for first nations are still limited in today’s society, thus the government can ensure that there is going to be more job opportunities from this new project. Secondly, the government can provide new facilities and a new area that all the first nations can use even after the dam construction. Thirdly, the government could also try to find the alternative way or location the hydroelectric project can be done. Canada possesses a huge amount of natural resources and land, so investigating that hydroelectric power would become a key. Lastly, the government should do more extensive and focus research on the project and how it can be done. At this point they are estimating that the dam will flood 83km of the river causing endangering wild animals inhabitant is that area. As the technology develops, there is always a better and efficient way of doing this at a low cost.

Establishing a partnership with another group of people is not a simple process that can be done by a brief discussion of few people. Partnership relations are about an exchange of views and ideas for the mutual benefits, hence respecting each other is utmost importance and should not be neglected.

Bibliography

O’NEIL, PETER. “First Nation Chiefs to Stage Site C Showdown.” Www.vancouversun.com. VANCOUVER SUN, 18 Sept. 2014. Web. 05 Oct. 2014.

MOORE, DENE. “First Nations Insist B.C. Choose between Site C Dam and LNG Projects in Peace River Region.” The Globe and Mail. The Canadian Press, 24 Sept. 2014. Web. 05 Oct. 2014.

“No Clear Yes or No on B.C.’s Mega-dam Site C Project.” The Globe and Mail. The Globe and Mail, 8 May 2014. Web. 05 Oct. 2014.

There has been a big change in monetary policy in the United States. Further cutback in quantitative easing, QE, has been arranged in FOMC in September. According to Janet Yellen, an American economist who takes the chair at the Board of Governors of the Federal Reverse System, if there is any move in restoration of labor market and increase in price, there is an enough possibility that QE could be terminated in the next FOMC which will be held in October. The money market is estimating that after the termination of QE, there will be a rise in the federal fund rate. There is an outlook for the future federal fund rate made by the members of FOMC has been released in the public. Despite the estimations of each member vary, the lowest estimation is indicating there will be a 2 % rise in the federal fund rate. If the rate of interest goes up, the interest that each enterprise has to pay increases, resulting in a fall in an income. Therefore, stocks will likely to decrease. Furthermore, it will make the process of investors taking loans which is used for investments more difficult, thus equity investment will be much harder to carry out and an enterprise has to face the difficulty in the growth of its stock price. It is true that newly-established enterprises are free from the pension and other legacy costs and their introduction of the new technology eases the innovative projects, compare to other established companies. However, such young enterprises have a major disadvantage in terms of the financial resources. Zero interest rate policy makes it relatively easy for such new business groups to collect funds from investors. Hereafter, the monetary policy of FRB will shift from the relaxation phase to the retrenchment phase. As quantitative easing being terminated and the interest rate increases, it will be quite difficult for new enterprises to gather capital. In my previous blog, I talked about Elon Musk’s brand new, innovative business and how they could be successful in the future. However, this change in monetary policy will significantly burden his businesses. What Elon Musk should do is that he should quickly realize both the spaceship development and mass production of the electric cars before the formalization of the rise in the interest rate and become a superior enterprise, which has a firm financial foundation and does not get much affected by the change in the interest rate.

Bibliography

HILSENRATH, JON. “Fed Chief Yellen Seeks Interest-Rate Consensus.” The Wall Street Journal. Dow Jones & Company, 14 Sept. 2014. Web. 25 Sept. 2014.

HILSENRATH, JON. “Fed Plots Cautious Course on Rate Hikes.” The Wall Street Journal. Dow Jones & Company, 17 Sept. 2014. Web. 25 Sept. 2014.