Question

Write a short note on Whats-app acquisition by Facebook? What was the rationale behind this deal? 250 words

Answer 1

The unique idea that made Whats App famous was its phone number based usernames and it being data-friendly (working under low data sage) and not having to associate with any social media. In other words, a true internet-based SMS alternative.

On the other hand, Facebook is a social media that has its own messenger but tied to its social media account. Even though now, Facebook Messenger allows people to communicate using phone numbers but this was not the case. Also, Whats App had gained the trust of a lot of people

Facebook's largest acquisition and one of the biggest Silicon Valley has ever seen. It is over 20 times more than Facebook’s Instagram acquisition, which made quite the splash in 2012. That begs the $22 billion the one important question why did Facebook break the bank to buy Whats App?

The main answer is user growth. In 2014, over 500 million peoples used Whats App monthly and the service added more than 1 million users per day. 70% of Whats App users were active daily, compared to Facebook’s 62%. Additionally, Whats App users sent 500 million pictures back and forth per day, about 150 million more than Facebook users.

Photos

500 million photos are shared on Whats App daily, whereas only 350 million images are crossing hands-on Facebook! We tend to forget that the reason Facebook paid $1 billion to acquire Instagram was to control images.

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Now, we are coming to the final factor: the Holy Grail of all Internet/Mobile based monetization methods – Advertisements. Face book and its investors know that advertisements bring dollars.

Whats App has a uniformed, global reach. 1 million downloads are happening every 24 hours it’s a big fact in the telecommunication industry, and the majority of them are new users from Asia and Africa. Also, Facebook needs a global reach to further expand its influence, and what better mechanism than to acquire a company that has 450 million+ users, spread all over the world.