In recent years, Facebook has been in an aggressive acquisition mode. The most famous acquisition — until today — was Instagram in 2012 for $1 billion.
Now, Facebook has announced a bid for messaging company WhatsApp for $19 billion. Does this bid make sense. Take a look at this Wall Street Journal chart.
Consider these observations, as reported by Reed Albergotti, Doug MacMillan, and George Stahl for the Wall Street Journal:
“‘While monetization will take time, we think the potential size of the user base and strong engagement on WhatsApp should ultimately lead to meaningful monetization,’ Sterne Agee analyst Arvind Bhatia said, adding that 70% of WhatsApp’s users use it daily, above Facebook’s 62%. ‘We note that WhatsApp’s user base is nearly 2x Twitter and growing at a significantly faster pace,’ the analyst said.”
“WhatsApp has long been seen as a takeover target for Internet giants. Google had reached out to buy the company several years ago, two people familiar with the situation said, while two other people said deal talks between the two companies also took place recently. A Google spokesman declined to comment. While Facebook’s shares fell Thursday, the decline would have been worse if Google had purchased WhatsApp.”
Click on the image for a WSJ video.