fb-whatsapp deal analysis_anupama

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Analysis of the Facebook-WhatsApp Deal and Google’s Response Anupama Prakash PGP Student IIM Kozhikode

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Analysis of the Facebook-WhatsApp Deal and Googles ResponseAnupama PrakashPGP Student! "o#hikodeIt was a deal that surprised some, shocked many, and left some gaping at the wall in sheer amazement. This is what Mark Zuckerberg did to the analysts of the fnancial world and to the general public when he announced that Facebook had decided to buy !year old "hats#pp for a whopping $% billion &'()$ut W%&'' (ake a look) 450 million users 70% active daily users 1 million new user registrations/daymmense gro*th in a rapid fashion for a +rm that hardly employs ,- odd people)Another Wall Street Shocker. (he Facebook-WhatsApp DealAsia Latin AmericaEuropeAfricaWhatsApp has a strong global reach*I e+pect "hats#pp to ,uickly touch $ billion users-W

atsApp ! A "ower

ouse in t

e #a$ing%o* is it possible'%an$stoWatsApp&spowerful features' (apid te)t messaging Engagingprivateandgroupcat options *uic$ +le saring ,lee$ user interface #inimumsystemre-uirementsand data usage .reemium#odel/freeusage+rst year0 10233 from second year4Another Wall Street Shocker. (he Facebook-WhatsApp DealWith the desktop market saturating and smartphone clientele e/ponentially gro*ing0 Facebook has been looking to establish a stronger presence in the mobile marketF$ App and !essenger reach limited to F$ 1sers2 3nly !oderate Successes2Facebook *as desperately looking for a turn-around in the mobile segmentAnother concern area of Facebook *as its 1ser Attrition5sersfrustrated witprivacy settingsand movingontooter connecting platformsFacebooks (*in Goalsncreasing mobile presenceGaining a loyal customer base(he 4,- million 5content6 mobile users of WhatsApp perfectly +lled the 7oid.ace6oo$ ! 7oncerns and "resent 8eedsAnother Wall Street Shocker. (he Facebook-WhatsApp Deal3ther $ene+tsFacebook earns ma8ority of its re7enues from 8ust 1S and 9anada2 WhatsApp *ill no* gi7e it a good complementary geographic presence29y6uyingWatsApp0:uc$er6ergas also$ept;oogleout0arivalwicad also6eencourtingWatsAppfor possi6ly an even iger priceed advertising on .ace6oo$Another Wall Street Shocker. (he Facebook-WhatsApp DealDeal ?4@ per user0 wic is muc lesser tan te value of a .ace6oo$ /11?@40 %witter /1@04 or a Lin$edAn user /1B042?4@?A@B?B-?C-So if the users of WhatsApp can be fairly relied on0 the acDuisition 7alue can be counted rational to an e/tentDeal e its growt strategy in term of acDuisitions and inno7ations2 9eing on te defensive and Gust a6sor6ing Wall ,treet (ivals will not elp sustenance2deal Success !odel