WhatsApp is by far Facebook’s largest acquisition and one of the biggest Silicon Valley has ever seen. It is over 20 times larger than Facebook’s Instagram acquisition, which made news in 2012.
Facebook saw WhatsApp not just as a growing adversary but as a possible killer of the social media app. As per Porter’s 5 forces analysis, WhatsApp was becoming a threat of substitutes for the company. WhatsApp was growing steadily in its percentage of market reach beating out popular mobile apps. So, Facebook saw both vulnerability and opportunity in WhatsApp and acquired it for a whopping $19B in 2014. By doing so, the company also kept WhatsApp out of the hands of other tech rivals.
WhatsApp plays a significant role in global areas crucial to Facebook’s growth. By putting monetization efforts on hold, Facebook focused on the future of international, cross-platform communications. Through this acquisition, the tentacles of Facebook are closer to reaching billions of people, and with a market of that size, Facebook is sure to find a way to eventually cash in.
Subscribe by Email
Follow Updates Articles from This Blog via Email
No Comments