The buy of WhatsApp by Facebook, in Facebook's mobile strategy despite some questions.

Two years after its buy of $1 billion for Instagram, Facebook bought WhatsApp in February 2014 for $19 billion.

The barriers to entry in the market of new technologies are more and more narrow. To avoid the threat of new entrants, the biggest digital companies such as Facebook, Yahoo, Apple or Google don’t hesitate to put huge sum of money to buy starts-up which have a great potential. With more 450 millions of active users per month and an expectation of 1 billion users according to M. Zuckerberg, WhatsApp had a better potential than Facebook messenger and so it was a big competitor, that’s why Facebook wanted to buy WhatsApp.  This buy is in the strategy of a social operating system, to have more and more users and to gather two tools which are Facebook and WhatsApp the best ways to communicate and share. That reinforce Facebook’s business model and strategy which are turn to mobile.  

  

But this buy is not an entry in the Asian or African market, because there are already the same services such as Line, Wechat in Asia and Mxit in Africa. In addition, this huge quantity of money could lead to an internet bubble, because WhatsApp has only 20 million of turnover according to Forbes and this buy dropped of about 4% the Facebook stock price.

With Instagram and WhatsApp, Facebook has now two out of services the more popular on smartphone and monetize and collect the data of both apps could be a great opportunity.


References:
www.bourse.lefigaro.fr, Indices-actions, <http://bourse.lefigaro.fr/indices-actions/actu-conseils/a-wall-street-l-acquisition-de-whatsapp-fait-chuter-l-action-facebook-988890>, consulted on 18/03/2014.
www.forbes.com, Home Page, <http://www.forbes.com/sites/parmyolson/2014/02/19/exclusive-inside-story-how-jan-koum-built-whatsapp-into-facebooks-new-19-billion-baby/2/>, consulted on 18/03/2014.