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Facebook buys WhatsApp: CEO Mark Zuckerberg explains why?


Facebook buys WhatsApp: CEO Mark Zuckerberg explains why
Facebook, on Thursday, agreed to buy mobile messaging service WhatsApp for $19 billion, making it the company’s largest acquisition. As per the terms and conditions of the deal, all 55 employees of WhatsApp including its founders will be granted restricted stock worth $3 billion that will vest over four years after the deal closes.Facebook CEO Mark Zuckerberg posted on his Wall, explaining why he bought WhatsApp.
The text of the letter is given below:I’m excited to announce that we’ve agreed to acquire WhatsApp and that their entire team will be joining us at Facebook.

Our mission is to make the world more open and connected. We do this by building services that help people share any type of content with any group of people they want. WhatsApp will help us do this by continuing to develop a service that people around the world love to use every day.

WhatsApp is a simple, fast and reliable mobile messaging service that is used by over 450 million people on every major mobile platform. More than 1 million people sign up for WhatsApp every day and it is on its way to connecting one billion people. More and more people rely on WhatsApp to communicate with all of their contacts every day.

WhatsApp will continue to operate independently within Facebook. The product roadmap will remain unchanged and the team is going to stay in Mountain View. Over the next few years, we’re going to work hard to help WhatsApp grow and connect the whole world. We also expect that WhatsApp will add to our efforts forInternet.org, our partnership to make basic internet services affordable for everyone.

WhatsApp will complement our existing chat and messaging services to provide new tools for our community. Facebook Messenger is widely used for chatting with your Facebook friends, and WhatsApp for communicating with all of your contacts and small groups of people. Since WhatsApp and Messenger serve such different and important uses, we will continue investing in both and making them each great products for everyone.

WhatsApp had every option in the world, so I’m thrilled that they chose to work with us. I’m looking forward to what Facebook and WhatsApp can do together, and to developing great new mobile services that give people even more options for connecting.

I’ve also known Jan for a long time, and I know that we both share the vision of making the world more open and connected. I’m particularly happy that Jan has agreed to join the Facebook board and partner with me to shape Facebook’s future as well as WhatsApp’s.

Jan and the WhatsApp team have done some amazing work to connect almost half a billion people. I can’t wait for them to join Facebook and help us connect the rest of the world.

Posted By Mantosh Pal

Opinion: Facebook panicked, bought WhatsApp!


Facebook is big. It has over 1 billion users. Almost everyone who is on the web has a Facebook account. Almost everyone who has a smartphone has the Facebook app installed.

Opinion: Facebook panicked, bought WhatsApp

But the success of Facebook in future is far from certain. The whole technology industry, the way we communicate through our gadgets, is undergoing a big change. And Facebook has not been exactly at the forefront of the change. When iPhones and Androids started reaching hands of consumers, Facebook was slow to grasp the trend. It treated the mobile part as afterthought and missed the chance to take a lead.

Facebook realized its mistake around two years ago and since then is putting mobile first. But, by that time it was already a little late. It faced several big challenges. The two biggest were Instagram and WhatsApp.

Now, Facebook has bought both.

Facebook probably paid too much for both. It is a big company with lots of resources and it could have probably built similar services in less money. But it is possible that it panicked. Though it had reasons to panic.

Almost every Facebook user utilizes the platform for sharing photos. But when Instagram debuted on iPhone, it found favour among web users who not only wanted to share photos but also wanted the photos to look good. Instagram helped amateur users (people who are not too tech savvy) click – or rather create – photos that looked great. It became popular because of its filters. Facebook tried taking it on in the mobile scene. It failed, realized that more and more people were using Instagram to share photos – something they earlier used to do on Facebook – panicked and made an offer that Instagram couldn’t refuse.

With WhatsApp, something similar happened. From the looks of it, WhatsApp is an instant messaging app. But looks can be deceptive. The app has metamorphosed into the primary communication tool, which is not only used to share text messages but also videos, audio files and images. The ability to form groups in WhatsApp means it has become a social networking app and is a direct competitor to Facebook.

In fact, for most people who use WhatsApp, it is more important than the Facebook app on their phones.

While Facebook remains an excellent service, there is also a feeling among its users that the social networking site has become a little messy. Several revisions have left the Facebook timeline cluttered and devoid of any character. Most Facebook users have too many people as their virtual friends, with many of them being almost strangers. There is too much noise on Facebook. On mobile, there are too many advertisements and promotions.

Facebook also looks a little confused about what its users want. It has tried Facebook Messenger, Chatheads, Facebook Home, but they haven’t exactly caught on. It has also introduced concepts like hashtags and trends – copied from Twitter – but so far there is no indication that users have liked these features.

In contrast, WhatsApp is direct. It is more personal. It has a sense of purpose.

WhatsApp has become an app that people use because they need. Facebook has become an app people (still) use out of habit.

In a way, buying WhatsApp is a pre-emptive move from Facebook. The social networking site is not going to get too many new users through WhatsApp. Anyone who is using WhatsApp, probably also has Facebook installed on his mobile phone. The revenue potential too is not that clear at the moment. WhatsApp is not rolling in money. It charges users less than $1 per year after one year of use. It doesn’t display advertisements. It doesn’t sell smileys or stickers. It doesn’t try to bundle additional services or offer any premium pack.

Even if WhatsApp has one billion paying users, the revenue with the current model is going to be around $1 billion. By any account, this is a very modest figure for a Silicon Valley company.

Facebook CEO Mark Zuckerberg pulled the trigger on massive deal for one reason: WhatsApp was turning into a huge competition. It was making mobile users spend less time on Facebook. This is the same reason why he spent almost $1 billion on an app that gave users photo filters.

Yes, with its massive reach, WhatsApp has potential to be a money-minting machine. But for now, Facebook is paying $ 19 billion to save itself from WhatsApp. How WhatsApp is going to help Facebook on mobile phones is going to be an afterthought.

 

Posted By Mantosh Pal