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Facebook Leadership Decision to buy whatsapp

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Facebook Leadership Decision to buy whatsapp
Manager’s Journal: Three Smart Lessons from Facebook's Purchase of WhatsApp
Link to the Article: http://www.forbes.com/sites/adamhartung/2014/02/24/zuckerbergs-3-smart-leadership-lessons-from-facebook-buying-whatsapp/
Facebook is the biggest online social networking service providing company. WhatsApp on the other hand is an IM (Instant Messaging) messenger service which also provides photo sharing free of cost. Though it started 5 years back, it was a threat to Facebook and it started losing its market share to WhatsApp. Facebook also provides the feature of messaging and photo sharing.
This was one of the biggest acquisition and many people criticized the decision but in my opinion this was a very good example of planning and leadership since it solved the concerns of both the companies. The article provides the insights of the situation of both companies and how with proper leadership and planning the deal becomes successful.
1. Move fast to avoid irrelevancy
Facebook is one of the few companies that adapt to the changing market very quickly. Today, companies loose their relevancy in months because of not understanding market change, especially digital technology companies like RIM, dell. These examples show that there is no sure shot success formula that companies can stick onto.
Today market is changing from PC’s to smartphones and Facebook was losing their potential smartphone users to WhatsApp. It was facing tough competition in acquiring users in the smartphone market. So instead of following the historical solution to beat them, they instead decided to reduce the competition around by buying it.

Fig. Customer Segment of Facebook and WhatsApp
2. Giving an acquisition independence is critical
Facebook took a great leadership decision by allowing the leadership of its product Instagram and WhatsApp differently even after the acquisition. For a company like WhatsApp that’s a beautiful thing. According to Facebook, they have purchased WhatsApp
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