Users were caught rather flat footed when Facebook decided to purchase WhatsApp.
It is also true to say that some WhatsApp users were also surprised at the move by the company to agree to be swallowed up by Facebook. Yet, on the other end of the spectrum, the ever eager user with technology evolution streaming in his mind; waited for the time to celebrate a union of the top developers and creators of marvelous apps on the internet today.
Reasons for Zuckerburg’s acquisition of WhatsApp
Whereas the world became excited about the cash values involved in the acquisition of WhatsApp by Facebook, critics soon pointed out that it was not a very healthy trend after all. It appears that Mark Zuckerburg of Facebook has gone flat out to neutralize all competition on the social media platform. Facebook bought WhatsApp for a whopping 19 billion dollars. The move, however, appears to have been a selfish one to stave off competition. The acquisition figure is viewed as obnoxiously suspect, given that WhatsApp was reportedly coming against a background of a mere $20 million profit margin in 2013. In fact, some of Facebook competitors such as Google had expressed interest in the firm but had declined to offer such a huge sum.
A Deserved Bid
Although there has been much criticism against the move by Facebook owners if you stopped to review the growth performance and client base that Whatsapp had amassed by the time Facebook made their move, the price is indeed justifiable. WhatsApp had a total of 450 million subscribers by then.
WhatsApp in Facebook; the Devil Is In the Detail
If you thought that the price offer by Facebook is the biggest headache that dogged and, perhaps, will hurt the company, you had better think again. Analysts point out that the working models of the two entities is worlds apart. Consequently, there is a need for integration and harmonization; a process that may involve more sums of money, apart from the possible bottlenecks that may take years to remove.
The Free Mobile Based Chat Medium
WhatsApp is an app that uses a cross mobile user exchange configuration for sharing messages and images. WhatsApp uses similar technology as your regular internet based chat platforms. Therefore the platform runs its operations on a free medium. It has attracted so many users in a short while because of its free service and relatively lower costs of sending messages.
It has been reported that over 70% of the apps users do it every day. Facebook’s reasoning was based on the fact that each of the WhatsApp subscribers was worth $42. According to the details of the deal, WhatsApp stakeholders are said to be slated to only own 8% of Facebook at the tail end of the deal.
WhatsApp maintains an independent brand even after the acquisition. Facebook appears to allow this kind arrangement for a more strategic business maneuver. Indeed, such an arrangement was witnessed when Facebook acquired Instagram. The fruits of the arrangement have since been witnessed. Instagram witnessed a tremendous growth in its client base even after it was acquired by Facebook. More recently, Instagram struck a deal with Omnicom for $100 million. Such developments strengthen a company’s financial base and it enhances its power to evolve positively.