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Four years ago, Brian
Acton (co-founder
of WhatsApp) applied for a job at Facebook Inc but he wasn’t offered one.
Yesterday, Facebook acquired WhatsApp for a record $19
billion, along with 50 staff members of WhatsApp.
Jan
Koum,
chief executive officer (CEO) and founder of WhatsApp went on to become a
member of the board of directors at Facebook.
Facebook
spent a fortune to buy out WhatsApp, which is perhaps one of the biggest
acquisitions ever. To
get a better idea as to how big of an acquisition this is, here is an example.
Pakistan’s total foreign exchange reserves have recently touched $8
billion;
so basically, WhatsApp Inc is worth more than our entire country.
However,
Facebook didn’t pay such a hefty amount just for a simple cross platform
software either; WhatsApp has a 450
million active
user base and a million more joining it on a daily basis; that’s a huge number,
by any means. With these statistics in mind, Facebook actually paid $42
per user.
Without changing the business model of WhatsApp, Facebook will need
approximately four years to achieve their breakeven point of $19 billion.
That’s not a bad deal.
It’s
simple – to get more active users and kill the competition for messaging in the
Smartphone industry, just like they bought Instagram
for $1 billion a
couple of years back, which had a user base of 33 million back then.
WhatsApp
is way ahead of the game and the competition (such as WeChat, Line, Facebook Messenger),
with a strong hold in Europe.
Off late
Facebook made amends to its privacy policies. Earlier, users had the option to
disable the search-by-email option but Facebook wiped the feature out
altogether. Now every user is discoverable by their email
addresses.
With WhatsApp also in the portal, Facebook will
have direct access to its users’ phone numbers. Just imagine, if WhatsApp gets
integrated with Facebook, you could be found via your phone number as well as
your email address. There’s no hiding from Facebook now.
Another
pro for Facebook in this deal is that, over the past few years, around 11
million people have left Facebook and moved on to other social media websites.
With this deal, those who shifted to WhatsApp will end up getting back onto
Facebook again.
Just like how Google encourages you to have a
Google+ profile with just a single click; Facebook can also give an option in
WhatsApp to make a new Facebook profile, using all the information from
WhatsApp.
This has actually widened the number of audience
for Facebook.
Along
with this, we can’t deny the fact that WhatsApp is spreading drastically.
Even Mark
Zuckerburg seconds
this and believes that the messaging app has literally outnumbered its
competition at a brisk pace and will easily achieve the one billion mark by
August 2015.
With
Google stepping into the Smartphone industry, it isn’t surprising to see
Facebook also jumping in. With the ever brimming advancements in technology, and
to keep up in the mobile industry, this can be a stepping stone. A Facebook
phone wouldn’t be a surprise either, in the near future. Blackberry has a
valuation of around $5
billion currently,
so Facebook can acquire them as well and launch its own line of Smartphones.
