Facebook has been rumoured in the past to buy the popular phone messaging app Whatsapp but nothing materialized. Today Facebook announced that it would be acquiring Whatsapp for $16 billion. Let that number sink in a bit. Facebook bought Instagram for a billion dollars and that was considered overpriced. Whatsapp is possibly worth 16 Instagrams!
Facebook is buying the competition out!
Facebook today is a internet giant but its growth happened on the PC screen. Their ads are far more effective on larger screen and not so much on mobile phones. This is why it bought Instagram whose growth was mobile only. Whatsapp is similar but only a bigger threat to Facebook.
There is a rising trend of younger people preferring WhatsApp and not on Facebook. They are creating group conversations and sharing photos on WhatsApp not Facebook.
Facebook is now shelling out huge amounts not just so they have a great product but also to buy out the competition. It could also be to avoid Google or Apple getting in and buying these products.
In 2009 Facebook turned down Brian Acton for a job. He lamented on Twitter that it would have been a great opportunity to work with great people but he was looking for life's next adventure. He was also rejected by Twitter for a job according to this tweet.
He went on to create Whatsapp and is now selling it for $16 billion to the same companies that did not give him a job.