Facebook Acquisition of WhatsApp

There’s no doubt that one of Facebook’s primary objectives is to connect the world and acquiring Whats App is key to their strategy. There are multiple companies trying to reach them, but no one has truly been able to do this yet. The five year old mobile application software Whats App definitely made a remarkable impact on the world of Information Technology, especially in mobile messaging. Because of the good start, Whats App has been able to compete favorably against other online messaging applications in the market such as Twitter and Skype. Whats App managed to emerge the most popular mobile messaging application with an estimated 450 million users all over the world.

 There are a many reasons that make Whats App popular with many smartphone users.
Firstly, Whats App utilizes broadband connectivity which enables its users to send texts and multimedia files easily via their cell phones. Moreover, it has amazingly reasonable prices by charging a paltry $1 for a year regardless of the number of texts, pictures, audio and video files a user sends during that period. In addition, Whats App has been able to get a strong hold in new and emerging markets especially in developing countries and in Europe where other online messaging applications have not really made a mark. Therefore, it was not surprising that Facebook, being the big company in the social networking scene, decided to acquire Whats App for a whopping $19 billion. In fact, Facebook’s bid to acquire a mobile messaging application had previously been unsuccessful and therefore it was expected that Facebook’s CEO Mark Zuckerberg would make such a move. Of the $19 billion, Zuckerberg paid $4 billion in cash, $12 billion in Facebook stocks and $3 billion in bonds. This is a huge capital-intensive venture, but the prospects that Facebook will be able to prove itself on the mobile messaging scene are worth the risk.

 Many industry experts have speculated on the real reason for Facebook deciding to acquire Whats App. Some are of the opinion that Facebook needed the pictures that most Whats App users had been sending across this program. Others felt that Zuckerberg needed to make an entrance into the mobile messaging program considering that Facebook’s version of mobile messaging was nothing compared to Whats App. However, after all the excitement has gone down, this was a major boost to Facebook, making it the central pillar for all messaging needs in the market, be it in the social media or mobile messaging frontiers. Furthermore, it is expected that with this acquisition, Whats App’s user database will increase exponentially at a rate of 1 million users everyday , by being under the Facebook wings. In addition, it is expected that Whats App is expected to become absolutely free in future in line with the policies of Facebook usage. In case this happens, mobile messaging users will be the beneficiaries making communication easier and more accessible to a vast majority of users. The only downside, however, is that users of Whats App must have smartphones whereas many mobile users in developing countries in Africa may still be too poor to own smartphones. In future, as smartphones become cheaper and more affordable to these populations, the real impact of this acquisition will be felt across the board.

 Previously, Facebook had also acquired Instagram at $3 billion and it’s apparent that Facebook’s resolve to dominate the online social networking and mobile messaging is firmly on course. This acquisition will definitely propel Facebook’s dominance in the mobile messaging industry as well.