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).
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