Wednesday 26 February 2014

Facebook Buys WhatsApp

Facebook Inc has agreed to acquire WhatsApp Inc from Sequoia Capital for a total consideration of $11.64 billion. That is 13 times Facebooks 2013 net income. WhatsApp has 450 million users with 70% active daily, which is 60% the size of Facebook's daily user community of 550 million. The acquisition reflects Facebook's attempt to stay at the top in a changing market. Trends away from using laptops and instead to mobile devices have challenged the Facebook platform. Facebook has responded by building up its own platform apps for photos and messaging but so far did not manage to beat WhatsApp. Therefore it simply buys its competitor now.

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