SAJVA PROJECT

PROPOSAL

FACEBOOK WHATSAPP ACQUISITION ANALYSIS

Section B Group 12

Richard Doley PGP/19/221

Shruti Nandkishore Gotarkar PGP/18/272

Tanuja Masgin PGP/19/293

Miranda Boro PGP/19/207

Margaux IE/19/026

Etienne Farbos De Luzan IE/19/017

INTRODUCTION

Facebook is a for-profit corporation and online social media and social networking service based in Menlo Park,
California, United States. The Facebook website was launched on February 4, 2004, by Mark Zuckerberg, along
with fellow Harvard College students and roommates, Eduardo Saverin, Andrew McCollum, Dustin Moskovitz,
and Chris Hughes.

Facebook has acquired more than 50 companies, including WhatsApp. The WhatsApp acquisition closed at a
steep $19 billion; more than $40 per user of the platform. The majority of the companies acquired by Facebook
are based in the United States, and in turn, a large percentage of these companies are based in or around the San
Francisco Bay Area. Most of Facebook's acquisitions have been 'talent acquisitions' and acquired products are
often shut-down. Facebook CEO Mark Zuckerberg has stated that

"We have not once bought a company for the company. We buy companies to get excellent people... In order to have a really
entrepreneurial culture one of the key things is to make sure we're recruiting the best people. One of the ways to do this is to focus
on acquiring great companies with great founders."

On July 13, 2015, Facebook became the fastest company in the Standard & Poor's 500 Index to reach a market
cap of $250 billion. As of April 2016, Facebook was the most popular social networking site in the world, based
on the number of active user accounts.

WhatsApp Inc., was founded in 2009 by Brian Acton and Jan Koum, both former employees of Yahoo!.
WhatsApp Messenger is a proprietary, cross-platform, encrypted instant messaging client for smartphones. It uses
the Internet to send text messages, documents, images, video, user location and audio messages to other users
using standard cellular mobile numbers. As of February 2016, WhatsApp had a user base of one billion, making it
the most popular messaging application. Its based in Mountain View, California, United States and was acquired
by Facebook Inc. on February 19, 2014, for approximately US$19.3 billion including US$4 billion in cash,
US$12 billion worth of shares, and an additional US$3 billion in restricted stock units of Facebook over four
years after the deal closed.

SCOPE & OBJECTIVES:

Through our project, we propose to Study and analyze the Facebook-WhatsApp deal: why Facebook took a
decision to by WhatsApp at an astounding price of 19.3 billion, the strategic measures taken up by Facebook to
acquire WhatsApp and if this decision has paid off for Facebook. Issues and challenges faced by Facebook in
recent years in terms of competition from other social media companies. In our effort to understand the strategies
adopted, we analyze the macro environment, internal environment, possible strategies available, strategies

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adopted, its implications and future scope. Also, we will briefly discuss about a few analogs and antilog. Assess
the challenges the deal could face in future and how these can be overcome.