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Monday, 24 February 2014

Analysis of Facebook Acquisition of Whats App

FACEBOOK
WHATS APP
      1.     Owner : Mark Zuckerberg
          1.     Owner: Brian Acton

       2.     Total Users: 1.3 Billion
2. Total Users: 512 Million
  3. Revenue: 7.8 Billion US $/Year
     3. Revenue: 1 Billion US $/ Year   


Swot Analysis of Facebook Before Acquisition:
1.  Strength:
   Ø No.1 in social Networking
           Ø Good Growth

     2. Weakness:
           Ø Facing problem to reach mass

     3. Opportunity:
   Ø More Profit
           Ø Reach at Mass

     4. Threat: 
   Ø Neck to Neck competition with Google Plus, LinkedIn, Twitter
Swot Analysis of Facebook After Acquisition:
1.  Strength:
   Ø Distinctive ahead in terms of users.

2. Weakness:
   Ø Huge Investment (19 Billion)

3. Opportunity:
   Ø To expand the business
   Ø Reach at Mass

4. Threat:

  Ø Difficult for competitors to beat facebook now but with merger & acquisition with other companies Facebook can beatable.



Estimation:
1. Why Facebook decided to acquire Whats App@ 19 Billion US $(Highest Tech Deal in World)???
Ans:
At 20.2.2014 = Facebook invested 19 Billion US $ in that 4 Billion cash & remaining in shares / stocks.
Whats App Revenue = 1 Billion/ year; as they charge 1$ / year/ user.
Monthly users 510 million*12= 6120 Million (At least)
Let’s assume 1 billion /year will be revenue.
In general at 20.2.2031 Facebook will recollect the whole invested amount.i.e 19 Billion in 19 years (For Sure).


Facebook Strategy:
1. After 20.2.2031, the money collected from Whats App will be extra income for facebook.
2. The Investment money (19Billion) can be collected in 7-8 years by allowing Ad Company to do promotion via Whats App.





Note: All the figures are subjected to change and analysis done by analyst is his personal analysis.



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