WhatsApp was already serving more than 450 million monthly active users, and Facebook was of course buying this potential too. But Facebook was looking for other opportunities. That number would probably not justify the amount of the acquisition deal. With millions users around the globe company was able to make annual revenue about $20 million. WhatsApp was making money by charging 1 dollar for their service worldwide. What must these people thought when Mark Zuckerberg announced new buy operation worth $19 billion at first word and nearly $22 billion when signing? And why was he willing to do so? Why the heck would somebody pay billions for an application developed by a dozen of people? Key factors enabling mergerīack in April 2012, Facebook bought Instagram, iPhone application of the year in 2011, for 1 billion dollars. Let’s now have a look from the Facebook point of view. All customers were quickly encouraging their friends to try the service.Ĭertainly, there are also other reasons why company becomes so successful. And there is no better marketing than a word of mouth. Instead, WhatsApp was built as lovemark, a brand connected with strong emotion. The company did not employ any employee to conduct marketing or PR. This is total amount of money company has invested in marketing. Service costs $1 per year! Without any other charges for SMS, this could save users nice bunch of money. Jan and Brian initially charged a dollar for their product. There were neither marketing tricks nor strong promotions campaigns to support the application. Number any user in need of instant communication will definitely like.ġ – As was mentioned above, company decided to have different style from beginning. While the team remained small, service was still highly reliable with uptime over 99.9%. Once again, number unheard in the business before. When calculating employee to customer ratio, one WhatsApp developer was serving more than 14 million active users. Later in October, when merger was realized, company was employing 56 people. Industry standard was around 10 to 20 percent.ģ2 – It may sound unbelievable, but only 32 people were working in the company in February. Engagement rates were also incredible, as more than 72% remained active daily. Facebook needed one more year.Įvery day, more than a million installed the app that time. When comparing with Facebook, they went over 100 million users in something over 2 years. Application reached that number faster than any other company in history. And numbers says it all for these guys.įour numbers tell the story of the company, which decided not to have a sign on the door of its headquarters in Mountain View.Ĥ50 – In the moment of announcing the acquisition, WhatsApp had more than 450 million of active users. Instead of developing so popular online games, rapidly growing business with promising returns, they focused on building a clean, superfast communication service. When Jan Koum the Ukrainian-born immigrant who dropped out of college and ex-Yahoo engineer Brian Acton founded WhatsApp company they probably didn’t even dream about what happened in three years later.įrom the moment of opening the newborn firm, both founders wanted a different kind of company.
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Also, I will try to bring up some information on why this merger happened and why it was important for Mark Zuckerberg to complete the deal. I will look into some details of the acquisition in this paper.
#What is slideshare app on facebook software#
Reuters stated that acquisition was the sixth biggest in technologies and biggest ever in history of acquisitions of software companies. Facebook CEO Mark Zuckerberg managed to agree on the deal with WhatsApp founders Jan Koum (38) and Brian Acton (42) for astonishing $22 billion. In February 2014 Facebook announced the firm’s biggest acquisition ever. An interesting merger/acquisition case study - by Peter Kovac Introduction