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A $19 Billion bet : How wise of Facebook?

 

The entire online industry is taken by a storm,with the news of Whatsapp’s acquisition. And that is indeed a hefty news for the social analysts,that is….Why would Facebook shell out 19bn dollars on just an instant messaging app? We would love to grope for an answer,and I’m sure….this is not an idiotic decision,and I hope you will also agree with this statement by the end of this article.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg, Facebook founder and CEO.

whatsapp-logo

Facebook INC. , is a named and famed organization,which boasts about its followers around the world and has the biggest ever advertisement reach. It is said that is we sum up the users on Facebook,it will be equivalent to a country. So why would an organization with such a large fan following, suddenly shell out a butt load of money on a messaging app? If we look at the users of Facebook in the world,we will find all our friends,relatives,teachers and every possible person known to us. Basically anyone with internet connectivity has turned towards Facebook. So it is out of fish to catch,hence they have played this risky gamble, just with a hope to explore new horizons of social-swarms.

Facebook-Messenger-Vs-Whatsapp-Messenger-Per-Country

According to Facebook reports,the growth in North America has been stagnant in the recent years. So the Facebook reach has almost saturated in this part of world,hence it has resorted to the other parts of the world ,not directly but indirectly via Whatsapp. This IM app is far behind w.r.t. to BBM and WeChat in North America,but in middle-east and the Asian countries Whatsapp is quite a common app,which is supported in a wide range of platforms…from Android to iOS and from Windows to Symbian. This move might prove beneficial to FB in the countries where the internet connectivity mainly depends on phones and not essentially on smartphones and computers.

“Leading mobile messaging company will continue to operate independently and retain its brand.”- Says the official statement of Facebook.

M_Id_461503_FacebookFacebook is in a self made crisis where it is out of horizons to expand,so this buyout can be seen as a desperate attempt to continue its growth and development. As it gains a lot of revenue from advertising, if there is no new group to advertise to, it advertising charm may soon wear out, just because of its repetitive reach. Hence, this move can be seen as a strategic gamble,whose success can only be gauged as a potential to attract the 350million users of Whatsapp,who are not yet on the Facebook roll list. If Facebook fails to utilize this potential properly this deal might just prove to be a bummer for the entire company,and the only person at gain would be the WhatsApp co-founder and CEO Jan Koum who will join Facebook Board of Directors,who had once been outright rejected from Facebook.

 

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