Facebook Acquisition of Whatsapp: Pros and Cons

Facebook Acquisition of Whatsapp: Pros and Cons

In the present world if you ask the one thing which most of the youngsters are addicted to, then the answer will be Whatsapp. So when Facebook decided to buy Whatsapp everyone was interested to know the details. Finally Facebook acquired Whatspp for $19 billion. Now when the deal is done let us see what are the pros and cons of the Facebook Whatsapp deal?

Pros

• Facebook holds a good position in the world of social media and has even launched Internet.org campaign to bring more connectivity to the many parts of the world. So now this is one more step taken ahead in the same direction.

• Although Facebook acquired Whatsapp still the company has said that it won’t be making any changes in the application for at least some time. It will operate independently within Facebook.

• If you analyze the cost of deal by per user then it comes around $42 which looks pretty reasonable in the present scenario.

• Facebook has the technology and the resources to bring the necessary changes in the app to generate revenue. The success of Instagram is a good example.

• Till this time it is good news for the users that ads won’t be used to monetize messaging systems.

Cons

• The deal is considered as quite expensive and it will require great efforts on the Facebook part to cover the acquisition costs.

• Whatspp has a different business model from Facebook. It doesn’t support ads and therefore it substantially diminishes the revenue growth prospects of Whatsapp.

• If Facebook brings in the ads in the Whatsapp model then there is a probability of losing the consumer’s interest.

• There are many mobile messaging apps in market and therefore it will be tough for whatspp to acquire the enough paying customers into its fold.

• There are no plans of modest monetization with Whatsapp. It will make it really tough for the Facebook to generate revenues.

Facebook has shown good progress in its business model and have made sure to bring the necessary changes at the right time. The deal might seem expensive at this time but definitely Facebook has means and resources to find out the right ways to generate revenue from Whatspp.