Why Facebook`s WhatsApp acquisition makes sense

Last Updated: Friday, February 21, 2014 - 11:39

Washington: 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.


First Published: Friday, February 21, 2014 - 11:39

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