TOPIC 6 - Do you think Facebook overpaid for WhatsApp? Why?

 


By Tan Wai Ken (TP070991) and Tsang Da Xin (TP071168)

No, I don't think Facebook are overpaid for WhatsApp. Based on the below statistic you can easily understand the underlying factor behind why Facebook pay 19 billion dollars for WhatsApp in 2014. (Edwards, 2014) During that year, the user base of the WhatsApp already goes above than the Messenger, with 600 million compared to 500 million. Thus, the founder of the Facebook Mark Elliot Zuckerberg and their stakeholder decided to invest WhatsApp due to its high potential to be success when the market of the communication tools was not really competitive. As WhatsApp being viral and common in our life, people tend to stick on it rather than choosing other tools, so it makes number of active users is important for a company take consideration. Moreover, WhatsApp as a communication tool introduced a new concept of messaging and calling through the Internet without telephone line to save money, which able to attract more user. Thus, Facebook gives more attention to WhatsApp and try to sustain by continuously upgrade the system to retain its existing users. As you can see at the monthly active user graph, user increasingly relied on it during 2020 which is the year of Covid-19 pandemic which shown that Facebook has make the right deal. Now, WhatsApp currently have more than 3 billion users compared to Messenger only 1billiom user. (Turner, 2024) This also prove that the decision that made by Facebook was correct as WhatsApp grown rapidly from 2014 to 2018.  


 
Figure 1: Number of Active User Between Popular Chat Apps (Source: Datareportal)

Figure 2: WhatsApp Growth History (Source: Backlinko)

REFERENCES

Edwards, J. (2014, February 19). Why Facebook had no choice but to pay $19 billion for WhatsApp. Business Insider. https://www.businessinsider.com/why-facebook-paid-19-billion-for-whatsapp-2014-2

Dean, B. (2023, December 12). WhatsApp User Statistics 2024: How many people use WhatsApp? Backlinko. https://backlinko.com/whatsapp-users

SIMON, K. (2023, May 11). Facebook Messenger Users, stats, data, trends, and more, DataReportal. 
https://datareportal.com/essential-facebook-messenger-stats

Turner, A. (2024, April 8). How Many Users are on WhatsApp? User Statistics (2024). BankMyCell. https://www.bankmycell.com/blog/number-of-whatsapp-users/

Turner, A. (2024, April 8). How many people use Facebook Messenger? Stats (2024). BankMyCell. https://www.bankmycell.com/blog/number-of-facebook-messenger-users/#section-1)

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