Mergers and Acquistions
Story 1 – Facebook buys Whatsapp
Facebook has bought instant messaging service Whatsapp for £11bn, giving Facebook access to Whatsapp 450 million users. The deal was split into £2.4bn in cash, £7.2bn in Facebook shares and £1.8bn in restricted stock awards for the Whatsapp founders and employees. Facebook has also paid a break fee of £1.2bn (Rushton 2014).
Facebook’s acquisition of Whatsapp can be described as a hostile takeover in effort for Facebook to monopolize on the Internet market, to gain a larger market share in a horizontal market and create overall organisational growth.
Facebook sees Whatsapp as a long term investment as Facebook has essentially spent its next 19 years of profit on the company, if it continues to make profit at the rate it is now.
Facebook recognizes its need to a messaging service that in extremely popular, Whatsapp with 450millionn users and Facebook with 1.2bn, the acquisition of this distinct messaging service should help Facebook; gain more control of the internet by eliminating a competitor, preserve its position in the market and to stop anyone else creating new ideas that could pose a threat, restricting competition in the social media messaging market. Facebook is among 4 big companies including, Apple, Google and Intel, which are the only established companies that are truly in the position to have the ability to acquire companies in its horizontal market place. This shows that Facebook has made a good decision in its bid for Whatsapp takeover, as this will help cement them in their position as an Internet giant for at least the next decade in a maturing market.
By acquiring Whatsapp, Facebook has added a social media application with distinct properties to its social media arsenal, which also includes Instagram. The positive of this is that all the different apps appeal to different groups of consumer, thus allowing them to control a larger market share and have access to a myriad of users, of which may only
Facebook has bought instant messaging service Whatsapp for £11bn, giving Facebook access to Whatsapp 450 million users. The deal was split into £2.4bn in cash, £7.2bn in Facebook shares and £1.8bn in restricted stock awards for the Whatsapp founders and employees. Facebook has also paid a break fee of £1.2bn (Rushton 2014).
Facebook’s acquisition of Whatsapp can be described as a hostile takeover in effort for Facebook to monopolize on the Internet market, to gain a larger market share in a horizontal market and create overall organisational growth.
Facebook sees Whatsapp as a long term investment as Facebook has essentially spent its next 19 years of profit on the company, if it continues to make profit at the rate it is now.
Facebook recognizes its need to a messaging service that in extremely popular, Whatsapp with 450millionn users and Facebook with 1.2bn, the acquisition of this distinct messaging service should help Facebook; gain more control of the internet by eliminating a competitor, preserve its position in the market and to stop anyone else creating new ideas that could pose a threat, restricting competition in the social media messaging market. Facebook is among 4 big companies including, Apple, Google and Intel, which are the only established companies that are truly in the position to have the ability to acquire companies in its horizontal market place. This shows that Facebook has made a good decision in its bid for Whatsapp takeover, as this will help cement them in their position as an Internet giant for at least the next decade in a maturing market.
By acquiring Whatsapp, Facebook has added a social media application with distinct properties to its social media arsenal, which also includes Instagram. The positive of this is that all the different apps appeal to different groups of consumer, thus allowing them to control a larger market share and have access to a myriad of users, of which may only