The Story Behind Facebook’s Acquisition of WhatsApp
The Story Behind Facebook’s Acquisition of WhatsApp
Facebook has indicated that the US regulatory bodies have cleared the $19 billion deal for acquiring popular mobile messaging service WhatsApp. However, the Federal Trade Commission has made it clear to the 2 companies that they must be committed to ensuring user privacy. The US Bureau of Consumer Protection has indicated that WhatsApp must adhere to privacy practices following the merger. The promise should be to not use the personal data of users for any targeted ads. The companies stand to lose their right to operate and they will be charged with the violation of section 5 of the Federal Trade Commission if they fail to adhere to the rules.
Though the deal has been approved by the US, it has not acquired the approval of authorities in Europe yet. However, both Facebook and WhatsApp are seeing this move as the major positive step forward. Facebook has successfully concluded one of the largest deals since its establishement. Its acquisition of the mobile messaging service will make it a leader in the world market. WhatsApp enables mobile users to send and receive messages and pictures over the phone. What makes this mobile messaging service popular is that WhatsApp has promised never to use its data for advertising purposes. The messaging service stores the phone numbers of mobile users, but it does not collect usernames, emails or any other valuable contact information. Apart from ensuring data privacy and security, WhatsApp also provides instant connectivity which has made it a huge hit among people from all sections of society.
When Facebook acquired WhatsApp, it became a matter for concern as to whether the mobile messaging service would compromise on its principles and allow user data to be accessed for advertising purposes. Facebook generates a huge amount of cash by providing targeted ads to catch the attention of its users. It also collects important information regarding the age, gender, academic background and occupation of its users. Facebook has created history by purchasing WhatsApp. But, in order to be successful, FB must preserve the integrity of WhatsApp. Preventing user data from being exploited by advertisers is part of it.
Federal charges were initiated in the US regarding the sharing of personal information in the year 2011. User consent was then made mandatory for certain privacy changes by Facebook as part of the 2011 settlement. WhatsApp and Facebook must honour their promise to protect user information. Facebook is also subject to changing market trends. This social media site gained popularity after eliminating leaders such as My Space which were the earlier sites for social networking. Facebook was built by youngsters who had a vision and things changed following the introduction of this revolutionary website.
Buying WhatsApp is part of the evolution process for Facebook. It is an attempt by the social networking site to keep in touch with the changing times and capture a huge chunk of the rapidly growing mobile messaging market. Changing communication modalities has always been the USP of Facebook. This social networking site was further challenged when users turned away from cumbersome PCs to handy mobile devices.
Most social networking sites have tried to combat changing market trends in a bid to change the way the public perceives them. Facebook has gone one step further. It seems to believe that if you cannot beat the competition, you should join them. This is the prime principle behind the $19 billion acquisition of WhatsApp. Another interesting point is that this acquisition seems to have come at a time when the internet company is doing well. Just less than 2 years prior to this, Facebook had raised nearly $16 billion in tech sector public stock offering.
WhatsApp is a cross-platform mobile app which enables users to exchange messages without paying telecom charges. This is a massive attraction for users worldwide. Facebook is seeking to capitalize on this trend and provide users with the best opportunities for networking and getting in touch with people. Jan Koum who is the co-founder of WhatsApp is a close friend of FB’s Mark Zuckerberg. This meaningful collaboration between the 2 countries has taken their partnership to a whole new level. It has also opened new doors for FB into an expanding mobile messaging market.
