If it wasn’t enough to take over Instagram in 2012 for $ 1billion, two years later they are here to shock the world with a $16 billion takeover of WhatsApp dwarfing the deal with Instagram. In addition to that, Facebook will provide access to the restricted stocks worth $3 billion to WhatsApp founders and employees that will vest over four years once the deal closes. Ironically, one of the co-founders of WhatsApp was turned down when he once applied for a job at Facebook. Today it is costing a hefty $19 billion for Facebook to seal the deal with the co-founders of WhatsApp. Pay back is definitely a b****!
I read a comment online this morning that instead of buying WhatsApp, Facebook could have bought around 46,402 houses in the UK with an average price of £245,458. The takeover does seem risky. There’s an old saying ‘A ship is always safe at a shore, but it’s not what it’s built for’, Mark Zuckerberg may be a risk taker but it is definitely a calculated one! Facebook is doing all that it can to stay firmly rooted in the social market for a long long time. The takeover gives them access to an enormous number of people among the young generation, especially because of the rapid expansion of WhatsApp users, over a million users are joining the WhatsApp network everyday! It is estimated that over 450 million users currently use WhatsApp and 70 % of those are active on a daily basis. However, industry experts such as Rob Enderle principal analyst at Enderle Group think that Facebook massively overpaid for the takeover but the final verdict on how successful this strategy will be will depend on the execution of their strategy so only time will tell.
What’s in it for Marketers? We’ve all heard of Facebook marketing. In fact marketers today do it all the time. It only keeps us guessing if Facebook will ever use the huge collection of database they now own via WhatsApp to reach out to millions of customers via WhatsApp message. Companies may be able to advertise to millions of WhatsApp users through a single text if Facebook makes this option available to marketers in the future. Who knows? Since Facebook loves to make new shockwaves, it only leaves us with a question; what’s next?
What do you think? Do you think Facebook struck a worthy deal? We’re happy to hear from you. Leave us a comment.
About the author
Having completed a Masters Degree in King’s College London in the field of Arts and Culture, Neha likes to be involved in creative projects and enjoys writing. She has written for a Magazine called ‘Interact’ in London and has also won the King’s Leadership Award for her passion for communications. She has also appeared on MTV and Channel V for her work as a recording artist.