Essays on Facebook and WhatsApp Case Study

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The paper "Facebook and WhatsApp" is a perfect example of a business case study. In order to boost its business position in the social media industry, Facebook engaged in a deal leading to the procurement of a messaging app, WhatsApp in a deal worth a total of $19bn (£ 11.4bn) in shares and cash. According to relevant financial analysis, this is the largest acquisition of the social networking giant. More than 450 million individuals use WhatsApp on a monthly basis making it one of the most popular aspects of communication leading to evasion of text messaging charges.

According to Mark Zuckerberg, who is the founder and CEO of Facebook, said that the acquisition of the messaging app is ‘ incredibly valuable’ (Kovach 2014). The application enables individuals to send messages across the Internet connections thus evading the text messaging costs. In addition, the organizations allege that they are on the verge of registering more than one million users on a daily basis. The application also makes money by charging the users $1 per year to substantiate the free model it operates on while addressing the needs and preferences of the users.

(Kovach 2014) Case Overview (Summary) Facebook sought to enhance its performance and market penetration in the social media industry. This is through the incorporation of WhatsApp into its own business concepts. The main objective of the organisation in the acquisition of this business concept was to increase the number of the target audience with approximately 1 billion consumers. The approach was vital because of the current 450 million subscribers of WhatsApp with a potentiality of reaching 1 billion subscribers in the next year of the transaction.

In addition, the business proponent was a strategic approach towards an increase in the revenues and output of Facebook in competition with diverse operators such as Twitter. The deal incorporates $4bn in cash as well as approximately $12bn worth of Facebook shares and an additional $3bn in stock to the founders and employees of the messaging app later. During the discussion of the deal, Jan Koum, WhatsApp’ s co-founder noted the plan to operate the organization independently as well as autonomously besides becoming a member of Facebook’ s board of directors (BBC News Business 2014).  

References

Kovach, S. 2014, ‘Facebook: Here’s Why We Just Spent A Fortune On WhatsApp’, Business Insider Australia, viewed 3 June, 3 June, 2014,

BBC News Business, 2014, ‘Facebook to buy messaging app WhatsApp for $19bn’, 20 February 2014, viewed 21 May 2014,

Kuchler, H. and Bradshaw, T. 2014, ‘Facebook buys WhatsApp in $19bn deal’, Financial Times, viewed 21 May 2014,

Guenthner, G. 2014, ‘450 Million Reasons Facebook bought WhatsApp’, Daily Reckoning, viewed 21 May 2014,

Kelly, G. 2014, ‘5 Key Reasons WhatsApp is worth $19 Billion to Facebook’, Forbes, viewed 21 May 2014,

Blodget H. 2014, ‘Everyone Who Thinks Facebook Is Stupid To Buy WhatsApp For $19 Billion Should Think Again’, Business Insider Australia, viewed 21 May 2014,

Mozur, P., Osawa, J., and Purnell, N. 2014, ‘Facebook-WhatsApp Deal: Still a Tough Sell in Asia’, The Wall Street Journal, viewed 21 May 2014,

Chu, K. Y. 2014, ‘Why Facebook bought WhatsApp’, Econsultancy, viewed 21 May 2014,

Berman, D. 2014, ‘Is Facebook's WhatsApp deal crazy? Let us do some math’, The Wall Street Journal, viewed 21 May 2014,

Seitz, P. 2014, ‘Facebook's WhatsApp purchase dwarfs deals by apple, others’, Investor's Business Daily, viewed 21 May 2014,

Hustad, K. 2014, ‘WhatsApp deal expands Facebook worldwide’, The Christian Science Monitor, viewed 21 May 2014,

Kopp, C. 2014, ‘4 Reasons WhatsApp may be worth more than $19 Billion’, The Wall Street Journal, viewed 21 May 2014,

Staff, F. 2014, ‘Young users: why Facebook bought WhatsApp for $19bn’, Firstpost World, viewed 21 May 2014,

Facebook and WhatsApp: Getting the messages, ‘Why Mark Zuckerberg’s social network is paying such a whopping sum for a messaging start-up’, The Economist, 22 February 2014, viewed 21 May 2014,

Albergotti, R., Macmillan D. and Stahl G. 2014, ‘Facebook investors shrug off concerns about $19 billion deal - shares rise as WhatsApp buy is seen helping social network's mobile, international operations’, The Wall Street Journal, viewed 21 May 2014,

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