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Whatsapp inc. acquisition date
Whatsapp inc. acquisition date









whatsapp inc. acquisition date

WhatsApp does operate in an intense competitive environment as it competes against numerous similar mobile messaging apps like Snapchat, Blackberry's BBM, Apple's FaceTime, Microsoft's Skype, and most notably Viber. It also stated, after the deal announcement, that it would start voice calls on its messaging service in mid-2014. However, things might change, as WhatsApp has a large base of international users. And this lack of advertising revenue from WhatsApp will make it very difficult for Facebook to recoup its sizable investment of $19 billion. In 2013, Facebook's revenue per user, or ARPU, grew 28% to $6.81 and WhatsApp's revenue generation capabilities are likely to fall short to that number.

whatsapp inc. acquisition date

This is a much different playbook from Facebook, and substantially diminishes the revenue growth prospects of WhatsApp. Instead, it offers its users one year of free service, and from the second year on, users pay a small fee of $0.99 annually. In fact, WhatsApp has been against ads ever since its inception. In fact, recently, Instagram signed a big deal with Omnicom for a reported $100 million, which will help expedite Instagram's revenue generation capabilities.īut unlike Instagram, WhatsApp's business model doesn't include ads. Instagram's user base surged past 180 million, and Instagram is an ad-supported model. WhatsApp will remain an independent entity, just like Instagram, which Facebook bought for $1 billion. In addition, Facebook will be issuing substantial amounts of stock to WhatsApp, which will dilute existing shareholders, and WhatsApp's stockholders will end up owning 8% of Facebook after the deal closes. The cross mobile communication platform earned a high price tag, because Mark Zuckerberg believes that he and his firm will be able to generate revenue to justify the price tag of $42 per user. WhatsApp has been growing rapidly with 70% of its monthly user base using the service every day. The revenue of WhatsApp in 2013 was reportedly under $20 million, so it's pretty easy to figure out why Google didn't want to pay an insanely high price. It has been reported that Google ( GOOGL -0.13%) had been interested in WhatsApp earlier, but couldn't cut a deal to acquire it. While WhatsApp is growing at a rapid-fire rate and has amassed a user-base of more than 450 million users, the real problem with the acquisition is not entirely the high price tag, but the business model of WhatsApp.įacebook's decision to pay such a large amount can be mostly justified as a defensive stance so that one of its bigger rivals were not able get their hands on WhatsApp. The company's eye-popping acquisition of WhatsApp for a whopping $19 billion portrays Mark Zuckerberg's intentions of gobbling up rising competitors to protect his own castle. Facebook ( META -2.56%) has been pretty successful in acquiring growing social platforms and integrating them into its own vast network.











Whatsapp inc. acquisition date