PowerPoint Presentation

Facebook - WhatsApp Acquisition

ByMohit SrivastavaMohammed SaquibAkash Mahamana

Jan KoumCEO of WhatsApp

Mark ZuckerbergCEO of Facebook

Acquisition

A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both.

Facebook recent acquisitionsInstagram in 2012 worth $1 billionSnapTu in 2011 worth $70 million

WhatsApp

Founded

Feb 24 2009

Founder

JanKoum

StableRelease

iOS Version2.11.7

Windows 2.11.356.0

Blackberry 2.11.529

Android 2.11.152

Operating System

iOS, Android, Blackberry, Nokia Series 40, Symbian, Windows, NokiaAsha

License

Proprietary

Facebook

Founded

Feb 4 2004

Founder

MarkZuckerberg,EduardoSaverin,Andrew McCollum,DustinMoskovitz,Chris Hughes

Revenue

US$7.872billion

Operating income

US$2.804billion

Net income

US$1.5billion

Users

1.23billion (monthly active)

Value of the Deal

WhatsApp is being Acquired for $19 billion

It includes - USD 4 billion in cash

- USD 12 billion worth of Facebook shares - USD 3 billion in restricted stock units

Jan Koum to join board of directors of facebook

Why Acquisition

MAU (monthly active users) will ramp up to 1 billion by 2019

Gives it additional leverage over Twitter in the battle for more direct messaging market share.

WhatsApps function will make it a near-essential add-on to smartphones, and thiscombined with smartphone user growth as well as user behaviour thats shifting more and more towards mobie.This will help Facebook to diversify its revenue sources away from the U.S.

SWOT Analysis

StrengthsLoyal customersMarket share leadershipGroup ChatAvaialable for all platformsDiversifyFree voice calls

WeaknessNot diversified, because other applications offers the same service and also function as social mediaTo access the account can only be paid by credit card onlyOnly works with a data plan or wifi

OppurtunitiesContinued development of technology platformsAdvanced technologyRecognized applicationModernization of peopleIncreased demand for smartphones

ThreatsCompetitors like Wechat, Viber, Tango, Skype, LineProduct substitutionSimilar applications and free

WhatsApp to add voice call to its product in second half of this year.

Two privacy groups filed a complaint with the Federal Trade Commission to block Facebook's $19 billion acquisition of messaging service WhatsApp. The groups want Facebook to provide more insight into how it intends to use data from the app's 450 million users.

Present Status

http://www.insidefacebook.com/2014/02/25/what-others-are-saying-about-facebooks-acquisition-of-whatsapp/http://www.huffingtonpost.com/quora/why-did-facebook-acquire_b_4875055.htmlhttp://finance.yahoo.com/news/must-know-facebook-acquires-whatsapp-162740629.htmlhttp://www.informationweek.com/software/social/facebooks-whatsapp-deal-under-fire/d/d-id/1114183http://www.forbes.com/sites/adamhartung/2014/02/24/zuckerbergs-3-smart-leadership-lessons-from-facebook-buying-whatsapp/http://edition.cnn.com/2014/02/21/opinion/wolf-facebook-whatsapp/http://indianexpress.com/article/business/world-market/facebook-to-acquire-whatsapp-for-usd-19-billion-in-cash-and-stock-deal/http://sequoiacapital.tumblr.com/post/77211282835/four-numbers-that-explain-why-facebook-acquiredhttp://marketrealist.com/2014/02/facebook-acquires-whatsapp-19-billion/http://timesofindia.indiatimes.com/tech/tech-news/software-services/WhatsApps-first-new-feature-under-Facebook-Voice-calls/articleshow/30951210.cms

Reference

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