$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.