$19 Billion. Most people can't even fathom that amount of money, but Facebook can! The social media giant is looking to secure its domination in the social media world, announcing that it will be purchasing the messenger app Whatsapp for $19 Billion. The purchase will be through a combination of cash and stock deal. But is it really worth so much money? Or is Facebook a little bit in over its head this time?
What is Whatsapp?
Whatsapp is a popular messaging application, allowing users to bypass SMS fees and limits by sending messages directly through the app via data or wi-fi.
Why does Facebook want it?
- Sends messages, pictures, audio and video files just as an SMS would
- Free use for one year, 99 cents per year following
- Great for international communication, avoids users having to pay international messaging fees
Facebook has seen a decline in youth using its social networking site. They are constantly looking to expand in the market and stay on top in the industry. Whatsapp looks to be the next best move. The application has 450 million users, and is adding 1 million users every day. With those numbers, the application is already on track to becoming the next Facebook in terms of usage. Whatsapp will be another revenue stream for the network giant.
Take a look at the map above, originally posted by Distimo.com. This clearly demonstrates why the Whatsapp messenger is so crucil for Facebook. With Facebook messenger downloads in blue and Whatsapp in green, you can see the apps use worldwide has already had a huge impact on the industry, and with the figures previously mentioned, it's only looking to get bigger!
Just as it did with Instagram, Facebook will be keeping the same branding as not to interfere with the extreme growth of the app. Critics, however, are finding the enormous price tag an unwise purchase for Facebook. What if the application loses pace and doesn't continue to add the users its expecting? Not to mention the new competition in messaging applications that is popping up daily.
It looks like only time will tell if this was a genius move by Facebook, or a $19 Billion oversight.
Information courtesy of: www.technologyreview.com, www.bloomberg.com
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