So the biggest acquisition in the history of business has been announced and nearly 19 billion is to be paid to whatsapp from facebook. Facebook, that has ruled the social space in the last decade has been finding it difficult to compete against the mobile messenger app. There is a lot of emphasis on retention of the user and whatsapp was winning the competition. The shift of internet towards mobile devices caught facebook in a ‘not very much prepared’ manner and quickly there was rise of an app driven ecosystem that was exclusive and interesting to the users. Is right of facebook to acquire one of the most successful app development company? What are the future implications for facebook?
There are reports that the application keeps on adding 1 million users daily and this is something substantial enough for an app development company to be acquired for billions. Facebook fought against whatsapp to gain advantage on mobile but failed. It just did not happen. Facebook was made for web that brought each and every tool together to add value to the social conversations. On the other hand whatsapp initiated altogether a new wave of social interaction. Facebook needed to compete against it and tried their best with the messenger app and later with an android launcher, both of them did not really take of. The only way they could have had their hands upon the most engaging interaction is by acquiring whatsapp. According to one of the reports messaging applications such as whatsapp, line and we chat are emerging as total ecosystems. As smartphones become the new tool to access internet and communicate, they are emerging as the biggest source of revenues too. Hence the acquisition is obvious from the point of view of revenues.
Facebook too, can learn more and delve deeper into optimizing their business around the mobile.With a team strength of 50, whatsapp is one of the most efficient app development company today and can be very helpful. Facebook’s attempts to rule the mobile has been criticized in the past and the acquisition may bring better understanding of the mobile ecosystem into the company. Facebook might go on monetizing the users through an ad based model which might or might not affect the whatsapp user base. However, one thing is certain, facebook has acquired its major competitor that could have been a great threat to the facebook ecosystem an another couple of years. While bulky deal raises a lot of eyebrows and naysayers, it is going to help FB in the coming times significantly.
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