Three Key Implications of Facebook’s $19 Billion Acquisition of WhatsApp

Three Key Implications of Facebook’s $19 Billion Acquisition of WhatsAppYou must have already heard how Facebook has agreed to pay $19 billion in shares, stocks and cash to acquire WhatsApp – the messaging service that boasts the patronage of over 450 million users.

Facebook’s announcement has seen market analysts branch into two groups – one group that feels WhatsApp will soon join the likes of Myspace and Bebo, and the other group that speculates that the acquisition of the multilingual messenger would go on to be the next YouTube.

Myspace was acquired for big bucks by News Corporation in 2005 and again in 2011 by Justin Timberlake and the Specific Media Group. Both times it proved to be a bad buy for the acquirers since users drained away quickly.

Google’s acquisition of YouTube in 2006, on the other hand, seemed a bad deal financially for Google at the time. Google paid the founders of the platform $1.65 billion. The acquisition of YouTube did, however, go on to prove the naysayers wrong and continues to flourish as a major social media platform.

While it is too soon to say if the WhatsApp deal will pencil, a few things are clear.

  • Facebook will be present, more strongly than ever, on smartphones.

Facebook’s mobile strategy is now core to its business and its future.  According to Mark Zuckerberg, Facebook wants to build a bunch of experiences that are mobile-driven.

  •  You won’t be able to advertise on WhatsApp.

 While you can now advertise on Instagram, WhatsApp has no plans to follow suit. The app’s CEO Jan Koum assured users nothing would change for them and the app will stick to its strict no-ads policy. Further, WhatsApp will also stick to its no games and no gimmicks policies.

Implication? WhatsApp will remain a messenger and not turn into a sprawling, multipurpose platform like Facebook.

  •  Facebook does however have a list of mobile phones for you.

 While you cannot advertise directly on WhatsApp, the acquisition opens up new opportunities for businesses to advertise outside of WhatsApp. For $19 billion, Facebook is after mobile users of WhatsApp, a number that currently totals 450 million people.  The acquisition of WhatsApp gives Facebook additional access to even more mobile users, particularly those overseas, where WhatsApp is prominent.

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