Mark Zuckerberg’s Facebook is one of the most popular Social Media Platforms in the world and it seems like they are determined to unite all social-media by slowly acquiring all other platforms one by one. This notion was further cemented by Facebook’s purchase of WhatsApp in 2014 for a whopping 16 billion Dollars which was much beyond the company’s valuation as it was earning little to nothing compared to some other platforms. The Price was agreed upon in 4 Billion Dollar Cash and 12 Billion Dollar in Facebook Shares.
In reality, though, Facebook had to pay much more than the initial 16.3 Billion Dollar deal. It paid a total of, 3.6 Billion dollars more to the WhatsApp Executives and Employees to get them to stay on after the acquisition. After this, the Facebook share price inflated before the regulatory authorities approved the Facebook WhatsApp Acquisition and this brought the total amount that Facebook Paid to 21.8 Billion Dollars.
This merge is a big deal
The Facebook WhatsApp merge is a bigger deal than most people would make it out to be and it shows from the change that has been brought to the app ever since it was bought by Facebook. As the recent social media roar regarding WhatsApp’s new terms and conditions would have you know, the application seems to be losing out on some of its key features one-by-one ever since the Facebook Whatsapp Acquisition.
To term it in simpler words, WhatsApp is becoming less private, or at least that is what Facebook is trying to do. The application earns virtually nothing compared to its huge number of users because it only charges a 1$ fee per year to some users in certain regions which brings in about 19 Million Dollars of Annual revenue but that comes nowhere near its 16 Billion Dollar evaluation in 2014 by Facebook. So that means that Mark Zuckerberg surely had some mysterious plans to up the company’s revenue after the Facebook WhatsApp acquisition.
This was shown more to be true because the two partners that initially launched WhatsApp in 2009 were put up against the wall over introducing some sort of advertisement service on WhatsApp which they refused and around 2017, they resigned from their designations. After being asked by Facebook CEO Mark Zuckerberg to find potential revenue streams, it is speculated that they suggested charging WhatsApp Business account owners a small amount to compensate for the revenue but this was put down because it was thought that this wouldn’t be enough. Both of the partners Koum and Acton left the company and Acton reportedly raised 50 Million Dollars for Signal, a company that now rivals WhatsApp.
Reasons behind the acquisition
All of this goes to show the reasons behind the Facebook WhatsApp merge which shows that Facebook intended to strip the messaging applications of some of its privacy and security features to make a more lucrative platform that allows them to generate Billions in revenue eventually. This would only be made possible if the platform removed some of its privacy features and served Ads to its users.
Facebook has been eyeing a couple of different revenue streams for a long time now and for a while, the focus seemed to be the introduction of a Global Payment service as disclosed by some sources on the internet that the company plans to bring in some sort of a digital currency which would then be used as a unified global payment service. This is being tested out in some regions but apparently, it still requires some more work as the company hasn’t officially announced it globally.
However, all is not grim when it comes to the Facebook WhatsApp buy because there are certain benefits of Facebook acquiring WhatsApp in case that a Global Payment service is introduced. WhatsApp is renowned for its epic end-to-end encryption which guarantees that all user messages and interactions are private and cannot be read or accessed by anyone. If this sort of privacy is brought to light in the shape of a Global Payment Service that can be implemented on all social media platforms that Facebook Currently owns, it would mean a unified Global Payment System that would open up so many possibilities for people all over the world to send and receive payments.
Benefits of the acquisition
Some other benefits of Facebook Acquiring WhatsApp include the fact that before being bought by Facebook, the company only had 55 employees. This means that those 55 employees were managing an application that was being used by billions of users. Being acquired by Facebook certainly opened a lot of doors for WhatsApp as well as it has become a more permanent contender in the top messaging applications being used by people all over the world.
Also, other benefits of Facebook acquiring WhatsApp are the amazing features that were put into the application after the merger, such as the Stories feature that allows the users to somewhat replicate Snapchat and post their daily activities on their Story Walls which can be seen by their contacts for a total of 24 hours before they are permanently deleted.
This feature was well received by the users and has since become a fan favorite but all of this brings one thing to notice, It seems like Facebook is building a monopoly on Social Media applications. As companies and capitalists realize that the world is slowly becoming a digital hub where people are on their mobile phones as soon as they wake up and share their personal and intimate lives on social media more than ever, they have rushed in to capitalize on the potential revenue lurking beneath all this.
This revenue comes from advertisements, as the turn of events would have us believe, the past two decades have improved digitization ten folds. E-Commerce stores are slowly becoming the primary ways that people buy things and Advertisements are being integrated and are being made data-driven day by day. It has come to such great lengths that you can now target specific age groups, specific genders, specific categories of people as an advertiser that you couldn’t even think of two decades ago.
Through Machine learning and modern technology, the world has become a Global Village now more than ever and companies are taking notice of this. The Facebook WhatsApp merge is to play a huge role in this age of Social media and all of us are yet to witness what fruits this acquisition harvests. However, there is no doubt that in the future, Facebook is looking to make Billions off of this application as a return on their investment.