Facebook - WhatsApp Acquisition

By
Mohit Srivastava
Mohammed Saquib
Akash Mahamana

Jan Koum
CEO of WhatsApp

Mark Zuckerberg
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.

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
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.insidefacebook .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 /
http://editi on.c nn.c om/2014/02/21/opini on/wol f -fac ebook - whats app /
http://indianexpress.com/ar ticle/busines s /world -market/facebook -to-acquire whatsapp -for-usd-19-billion -in-cas h -and -s toc k -deal /
http://s equoiac api tal .tumblr.com/pos t/77211282835/four -numbers -that explain-why -facebook -ac qui red
http://marketrealis t.c om/2014/02/facebook -acqui res - whats app -19-billion /
http:// timesofindia.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