Facebook acquired WhatsApp in a $19 billion deal in 2014. WhatsApp is a cross-platform mobile messaging app that was founded in 2009 and had over 450 million active users at the time of the acquisition. The acquisition was Facebook's largest to date and was aimed at gaining a larger share of the growing mobile messaging market and leveraging WhatsApp's large user base and rapid growth to diversify Facebook's revenue sources internationally. The summary analyzes the value of the deal, Facebook and WhatsApp's histories and stats, and reasons for the acquisition such as expanding Facebook's mobile presence and pursuing the growing direct messaging market.

1. PRESTIGE INSTITUTE OF
MANAGEMENT & RESEARCH
TOPIC
Facebook – WhatsApp Acquisition
Presented By-
Aatur Porwal (01)
Manish Yadav (20)
Manmohan Singh (21)
Vijay Patidar (55)
Vishal Patel (57)
Submitted To-
Prof. Dheeraj Ahuja Sir

2. Jan Koum
CEO of WhatsApp
Mark Zuckerberg
CEO of Facebook

3. Acquisition
• A corporate action in which a company buys most, if not all, of
the target company's ownership stakes in order to assume control
of the target firm.
• Acquisitions are often made as part of a company's growth strategy
whereby it is more beneficial to take over an existing firm's
operations and niche compared to expanding on its own.
• Acquisitions are often paid in cash, the acquiring company's stock or a
combination of both.
• Facebook recent acquisitions
• Instagram in 2012 worth $1 billion
• SnapTu in 2011 worth $70 million

4. Founded
Founder Stable
Release
Feb 24 2009
Jan Koum
iOS – Version 2.11.7
Windows – 2.11.356.0
Blackberry – 2.11.529
Android – 2.11.152
iOS, Android, Blackberry, Nokia
Series 40, Symbian, Windows,
Nokia Asha
Operating System
License Proprietary
WhatsApp

7. FaceBook
Founded Feb 4 2004
Founder
Revenue
Operating income
Net income
Mark Zuckerberg, Eduardo
Saverin, Andrew McCollum,
Dustin Moskovitz, Chris Hughes
US$7.872 billion
US$2.804 billion
US$1.5 billion
1.23 billion (monthly active)Users

8. Value of the Deal
• WhatsApp is being Acquired for $19 billion.
• It includes
- USD 4 billion in cash
- USD 12 billion worth of Facebook shares
- USD 3 billion in restricted stock units
• Jan Koum to join board of directors of facebook.

9. Why Acquisition
• MAU (monthly active users) will ramp up to 1 billion by 2019
• Gives it additional leverage over Twitter in the battle for
more direct messaging market share.
• WhatsApp’s function will make it a near-essential add-on
to smartphones, and this—combined with smartphone user
growth as well as user behavior that’s shifting more and
more towards mobie.
• This will help Facebook to diversify its revenue sources away
from the U.S.

10. SWOT Analysis
Strengths
• Loyal customers.
• Market share leadership.
• Group Chat.
• Available for all platforms.
• Free voice calls.
Weakness
• Not diversified, because other applications offers the same.
• Only works with a data plan or wifi.
• Negative impact on social media.

11. Opportunities
• Continued development of technology platforms.
• Advanced technology.
• Recognized application.
• Modernization of people.
• Increased demand for smartphones.
Threats
• Competitors like Wechat, Viber, Tango, Skype, Line.
• Product substitution.
• Similar applications and free.

12. Present status
• WhatsApp to add voice call to its product in second half of this
year.
• Two privacy groups filed a complaint with the Federal Trade
Commission to block Facebook's $19 billion acquisition of
messaging service WhatsApp.
• The groups want Facebook to provide more insight into how it
intends to use data from the app's 450 million users.

13. Thank You