Facebook - WhatsApp Acquisition

By
Mohit Srivastava
Mohammed Saquib
Akash Mahamana
Jan Koum Mark Zuckerberg
CEO of WhatsApp CEO 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 acquisitions

• Instagram in 2012 worth $1 billion
• SnapTu in 2011 worth $70 million
WhatsApp
Founded Feb 24 2009
Founder Jan Koum
Stable Release iOS – Version 2.11.7
Windows – 2.11.356.0
Blackberry – 2.11.529
Android – 2.11.152
Operating System iOS, Android, Blackberry, Nokia
Series 40, Symbian, Windows,
Nokia Asha

License Proprietary
Facebook
Founded Feb 4 2004

Founder Mark Zuckerberg, Eduardo

Saverin, Andrew McCollum,
Dustin Moskovitz, Chris Hughes

Revenue US$7.872 billion

Operating income US$2.804 billion

Net income US$1.5 billion

Users 1.23 billion (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.

• WhatsApp’s function will make it a near-essential add-on to

smartphones, and this—combined with smartphone user growth
as well as user behaviour that’s shifting more and more towards
mobie.

• This will help Facebook to diversify its revenue sources away from
the U.S.
SWOT Analysis
Strengths
• Loyal customers
• Market share leadership
• Group Chat
• Avaialable for all platforms
• Diversify
• Free voice calls

Weakness
• Not diversified, because other applications offers the same
service and also function as social media
• To access the account can only be paid by credit card only
• Only works with a data plan or wifi
Oppurtunities
• Continued development of technology platforms
• Advanced technology
• Recognized application
• Modernization of people
• Increased demand for smartphones

Threats
• Competitors like Wechat, Viber, Tango, Skype, Line
• Product substitution
• Similar applications and free
Present Status

• 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.
Reference
 http://www.insidefac ebook .c om/2014/02/25/what -others -are-saying -about -
facebooks -acquisition -of- whats app/
 http://www.huffingtonpos t.com/quora/why -did-fac ebook -
acquire_b_4875055.html
 http://financ e.yahoo.com/news /mus t -know-facebook -acqui res - whatsapp -
162740629.html
 http:// www.informationweek .com/software/soci al/facebooks -whatsapp -deal -
under-fi re/d/d -id/1114183
 http://www.forbes .com/si tes /adamhartung/2014/02/24/z uckerbergs -3-s mart -
leadership-less ons - from - fac ebook -buying - whatsapp /
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explain-why -facebook -ac qui red
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 http:// ti mes ofindia.indiati mes .c om/tech/tech -news /software -
services/WhatsApps - fi rs t -new- feature -under-Facebook -Voice -
calls/articleshow/30951210.c ms
THANK YOU