Why Facebook's WhatsApp acquisition makes sense
A need to expand user base, owning communications layer of the world, and enhance product portfolio- these are some of the reasons that pushed Facebook to acquire popular messaging service WhatsApp for a whopping 19 billion dollars.
Facebook CEO Mark Zuckerberg says that he wants to "connect the world's people," and acquiring WhatsApp was just about that and much more.
According to The Verge, between Facebook and WhatsApp, about 1 billion photos and 30 billion messages are sent per day and while Facebook's Messenger service has not functioned as an essential utility for many, WhatsApp has indeed replaced the need for SMS.
With the acquisition, Facebook's reach and communication layers have thickened and spread wider than before.
Re/Code's Kara Swisher said that Facebook is now a conglomerate, kind of like Disney, owning all the best brands and serving all demographics simultaneously.
The report said that Facebook isn't only expanding its product portfolio but also diversifying its business model by keeping WhatsApp independent and allowing it to run its 1 dollar-a-year revenue model.
In Zuckerberg's own words, WhatsApp is the only app he's ever seen with higher engagement than Facebook itself, which makes the deal sensible as user engagement is the prime goal for the social networking giant that recently turned a decade old.
(Posted on 21-02-2014)