The real reason why Facebook bought Whatsapp

The real reason why Facebook bought Whatsapp

The real reason why Facebook bought Whatsapp

In April 2012, Instagram, together with thirteen workers, was offered to Facebook for US$1billion in money and inventory. According to a number of reports, the deal netted Systrom US$400 million based mostly on his ownership stake within why facebook bought whatsapp the enterprise. One of the important thing contributions to the acquisition was that Mark Zuckerberg said Facebook was “dedicated to building and growing Instagram independently”, allowing Systrom to proceed to guide Instagram.

Lessin, who attended Harvard University with Zuckerberg, and who had been an angel investor in Hot Potato, was apparently additionally influential in Facebook’s determination to amass Hot Potato. WhatsApp is a simple, fast and reliable mobile messaging service that is used by over 450m people on every major mobile platform. More than 1m people sign up for WhatsApp every day and it is on its way to connecting 1bn people. More and more people rely on WhatsApp to communicate with all of their contacts every day. WhatsApp is a simple, fast and reliable mobile messaging service that is used by over 450 million people on every major mobile platform. More than 1 million people sign up for WhatsApp every day and it is on its way to connecting one billion people.

why facebook bought whatsapp

Messaging app service Beluga, founded in 2010, was acquired by Facebook a year later. Facebook bought Beluga within the midst of the startup’s fundraising course of for an undisclosed sum. According to reviews in May 2016, the company’s estimated value was said to be approaching $22 billion within the occasion of a new spherical of funding.

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The WhatsApp acquisition is one of the IT industry’s biggest deals. It is larger than any that Google, Microsoft or Apple have ever done. Google’s biggest deal was its $12.5 billion purchase of Motorola Mobility, while Microsoft’s biggest acquisition deal was of Skype at $8.5 billion.

However, Facebook share costs soared to $seventy seven.56 from $68 by the point the regulatory approval process concluded in October. By then, the agreed upon 184 million Facebook shares inflated the final sale worth by a further $1.7 billion. Onavo has occasionally been categorised as spy ware, forcing Facebook to pull Onavo from each the iOS and Android app stores within the face of criticism.

  • In February 2013, Reggie Brown sued Evan Spiegel and Bobby Murphy.
  • So buying WhatsApp allows Facebook to both own “the next Facebook” and prevent “the next Facebook” from eating Facebook’s lunch.
  • An expensive communication channel, difficult to manage and to track and more importantly, not customer friendly .
  • During April’s depositions, Brown testified that he had believed he was an equal companion, and that he had agreed to share costs and earnings.
  • It represents almost 10% of Facebook’s overall value — for a “messaging app.”
  • Instagram had 13 employees at the time of the purchase that means each one received 77 million dollars making it the highest payout in internet history.

The company, which started out as a data compression and VPN outfit, quickly proved its value as a data analytics provider, tracking app usage across hundreds of thousands of devices. Also, as per Dow Jones VentureSource, the deal is the largest acquisition ever of a venture capital-backed startup. Surprisingly, informal discussions between the two companies had been going for two years. Facebook founder Mark Zuckerberg first reached out to WhatsApp co-founder Jan Koum in 2012. However, the deal started shaping up earlier this month when Koum went to Zuckerberg’s house in Palo Alto for dinner.


Instagram is a photo and video-sharing social networking platform that was launched in 2010. Through the Instagram app, users can addContent, edit, and tag photos and videos. The firm remained unbiased up until it was acquired by Facebook for $1.0 billion in 2012. While Facebook purchased Instagram because the picture-sharing firm was garnering significant consideration from enterprise capital firms and other traders. It permits users to utilize Snapchat filters by way of PC webcams in video chat and reside streaming services similar to Skype, Twitch, YouTube, and Zoom. Snap additionally announced additional integration with Twitch.

why facebook bought whatsapp

Throughout much of its historical past, WhatsApp has allowed customers to send messages and make calls directly to different customers for no cost, no matter location. Users also can ship photographs, videos, and paperwork over the platform. Facebook bought Instagram in 2012 for $1bn (£760m), and WhatsApp in 2014 for $19bn. The App Annie ranking highlights just how much power and control Facebook CEO Mark Zuckerberg has. The four main apps that Zuckerberg oversees boast more than a billion users each. By February 2013, Snapchat confirmed a $thirteen.5 million Series A funding round led by Benchmark Capital, which valued the corporate at between $60 million and $70 million.

What is impressive about WhatsApp is its rapidly increasing user growth. WhatsApp is the fastest growing company in terms of users, since it managed to reach 419 million users in just 4 years, while Facebook only had 145 million users at its first 4 years. It is estimated that almost 1 million users join WhatsApp every day, which will soon lead to an even bigger user growth. With a shared mission of enhancing global connectivity via internet services, the merging of forces will likely accelerate growth for both companies. The social community appears to be strictly excited about increasing.

Why Facebook Acquired WhatsApp

Facebook needs to expand its Europe and emerging markets presence. As TechCrunch’s Josh Constine notes, WhatsApp is huge in developing countries. Facebook could also use WhatsApp to help bring more people online through subsidized Internet, which Facebook already offers in some countries. Right now, WhatsApp has more than 450 million active users — meaning they use the service at least once a month — compared to 1.23 billion for Facebook. Those users send 500 million pictures back and forth per day, about 150 million more than Facebook.

According to Business Insider,Google actually offered $10 Billion to buy the messaging app. There was also rumours that Apple was interested in making a bid. This, alone shows that Facebook now has one up on the likes of Google and Apple, regardless of how much it cost them. Marketers across the world sat up and paid attention to what could be termed as the biggest big data acquisition we’ve witnessed in the era of the internet.

Messaging apps have become a threat to companies like Facebook since it prevents them from expanding overseas and obtaining access from coveted demographics in emerging markets. WhatsApp is used by 450 million people to send a variety of texts, photos, videos and more to friends all over the world for free. I think it’s also a reaction to the younger generation’s shift away from Facebook and to more private messaging platforms such as Snapchat, Inc.

Is Facebook going to kill WhatsApp and/or ruin it with advertisements?

The app is available on many platforms and is free to download and has no ads, but it costs $1 per year after the first year. Social networking is the use of internet-based social media platforms to make connections and share various media with friends, family, colleagues, or customers. WhatsApp plays a significant role in global areas crucial to Meta’s future growth. By putting monetization efforts on hold, Meta is focusing on the future of international, cross-platform communications. Through the acquisition of WhatsApp, the company is poised to reach billions of people, and Meta is sure to find a way to eventually cash in. Instagram is directly controlled by Facebook since mark zuckerberg bought the company for 1 billion dollars.

Technologists, social media experts and analysts scrambled to make their thoughts and predictions heard. And as Facebook has become an increasingly mobile company it has invested in developing its mobile app ad format which is designed to drive app downloads from Apple’s App Store and Google Play. Facebook offers a login box to drop your phone number at any website or online service.

Facebook, which competes with in style cell apps corresponding to YouTube and Snapchat, has been intensifying its concentrate on video content material over the previous a number of years. Brown stated that he had as soon as been the chief marketing officer for the initial selfie app used to launch Snapchat, providing evidence of contacts with publications corresponding to Cosmopolitan. He also claimed that he had come up with the original idea, which he had ultimately called Picaboo, and that he had created the mascot brand for the product whereas working with Spiegel to promote and market the concept. Originally titled Toyopa Group, LLC, Brown said that he had named the newly shaped company as properly. And France; and 13 more European international locations in May 2018. Wall Street reacted positively to the information, which drove Facebook shares up 2.three% on Wednesday to shut at $202.

Facebook’s technique has been to buy potential rivals before they will get too huge. In the process, the company generally has paid exceptionally high costs for some offers. Facebook filed for an initial public providing on February 1, 2012. The preliminary prospectus stated that the corporate was seeking to lift $5 billion.