Whatsapp Case Summary

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In this article it talks about the acquisition of WhatsApp by Facebook. The WhatsApp program which is considered to be an alternative for text messaging was acquired by Facebook in a cash and stock deal worth 19 billion dollars. Facebook became partners with a great brand being that the popularity of its users has gained to 450 million which surpasses the amount of consumers using Twitter by 210 million. The deal established requires that Facebook issue out 3 billion dollars worth of stocks to the 55 employees of WhatsApp during a four year timeframe.
The deal that was struck doesn’t only benefit WhatsApp but also the investors which turns out to be Sequoia Capital that believed in the text messaging program. With the investment of 60 million …show more content…

Financial benefits for Facebook partnering with WhatsApp seems vague at the moment being that the company allows new users free usage of the service on their sign-up year, then pay one dollar annually to continue service. Having the service at a low cost to consumers the company operates without promoting any third party advertisements. Before Facebook and WhatsApp joined forces they both lost opportunities to partner with other brands whereas Facebook lost a deal with Snapchat for 3 billion dollars and WhatsApp with Google’s …show more content…

Being that Zuckerberg expressed interest for the company since 2012 through email contact with Koum. The approach to become partners was done initiated through Zuckerberg on February 9th and Koum returned with a response on February 14th by going to Zuckerberg’s home. Before Koum struck this deal with Facebook to become a member of the board of directors there he was a Yahoo engineer. These two companies were a perfect fit being that they share the same core consumer group which happens to be young adults with WhatsApp connecting more the market than Facebook in popularity. If estimated the 19 billion dollars that Facebook offered WhatsApp for the partnership it can considered they paid forty dollars per potential consumer WhatsApp

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