$19B 4 txt app WhatsApp…omg! Harvard Case Solution & Analysis

For $19 billion, Facebook declared the acquisition of WhatsApp in February 2014. WhatsApp was a comparatively young firm that brought in revenue in 2013 and gave employment to just 50 individuals.
WhatsApp was one of the services among many mobile messaging amenities that allowed users to connect with each other without paying exorbitant message fees. However it popularity and growth potential lured Facebook, a company encompassed with abundant challenges and finding opportunities to dispel its user base.

Facebook the social networking website that allowed users to share information amongst friends, believed WhatsApp was a next most logical step that would assist it in “making the world more open and connected”. When Facebook declared the acquisition, it promised to keep WhatsApp operating individually, allowing the founders to maneuver the direction of the company and permitting WhatsApp to stay true to its mission. Yet several argued over the logic behind paying so much for a small organization with few revenue streams. Was Facebook’s decision to purchase WhatsApp rational? Even at an amount of $22 billion? How could it develop value by amalgamating WhatsApp with Facebook?

PUBLICATION DATE: January 14, 2015 PRODUCT #: 715441-HCB-ENG

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