On 19 February 2014, Facebook announced that it’s going to buy Whatsapp for $19 billion in cash and stock. Whatsapp has over 450 million users and 70% of them are active every single day. Whatsapp is one of the biggest social interaction messenger and has highest number of users. Near about 400 million photos and 10 billion messages each day are shared by WhatsApp users.
In a recent post, Face book founder Mark Zuckerberg stated that, “WhatsApp will complement our existing chat and messaging services to provide new tools for our community. Facebook Messenger is widely used for chatting with your Facebook friends and WhatsApp for communicating with all of your contacts and small groups of people. Since WhatsApp and Messenger serve such different and important uses, we will continue investing in both and making them each great products for everyone”.
According to a filing with the Securities and Exchange Commission, Facebook will acquire WhatsApp for about $4 billion in cash and 183 million Facebook shares, which are worth an estimated $12 billion. The deal also includes an additional $3 billion in restricted stock units for WhatsApp employees that vest in four years. Facebook observes that most of the young generation is using different social media for communication. 450 million people use WhatsApp; 300 million of them use it daily. Collaborating facebook with whatsapp makes the facebook a leading usage of mobile agents.
Seeing WhatsApp’s growth rate so high facebook has to do something for being a leader in social networking world. Having acquisition of WhatsApp facebook has become a powerful rival to telecom providers in mobile messaging. Many believe that Facebook just bought out a competitor. This leads to a question that “Facebook will buy anything that competes it?” firstly the Instagram and now Whatsapp. In many developing countries the primary reason of buying smartphones is that they want to use Whatsapp. As it saves money for sms and provide a very good means for having group talk and sharing media’s.
The more we discuss about this its make a clear sense why facebook buy Whatsapp. Asia and Africa continents are the fastest growing smartphone usage areas and facebook wants to attract them and make them use its products by providing them better service and features.
The future challenges for facebook will be how to manage such a huge amount of data flowing in whatsapp. Apart from this there are other challenges for them is the channel distribution for source of revenue, the mobile messaging asset etc. With enormous number of user facebook has to keep their service active and it requires the well designed infrastructure for data centers. Another challenge is that they have to include new features so that users cannot navigate to other social interaction applications and leave them.
Shivam Srivastava
Merchandising Officer
Vishal Mega Mart