“Facebook’s WhatsApp acquisition is akin to putting Messi’s legs on a sumo wrestler”
Facebook’s announced acquisition of WhatsApp for USD16 billion is a simultaneously offensive and defensive move that will send a shiver up the spines of social platforms and telcos worldwide, according to Victor Basta (pictured), managing director of Global M&A advisory firm Magister Advisors…
Under Facebook’s ownership we can expect WhatsApp to ramp even faster, and extend its international reach even more aggressively. With the parallel sale of Viber to Rakuten, this means that two major ‘over the top’ messaging companies have traded hands into much larger players.
The WhatsApp deal is a conquest of another emerging platform by Facebook which is increasingly looking like a digital republic. WhatApp’s 400M+ user base is bigger than Twitter’s which has a higher valuation. The deal buttresses Facebook against a potential decline in engagement on its core platform and adds another convenient layer of engagement for those in its existing user base that don’t currently use WhatsApp and potentially better social integration for those that do.
It is also yet another blow to mobile service providers globally as it is essentially game over for text revenues. Mobile operators are the digital drug mules of the 21st century and this acquisition will only increase their burden.
The deal is akin to putting Messi’s legs on a sumo wrestler – offensive and defensive at the same time. Defensive in the sense that it locks another burgeoning social platform, alongside Instagram, into the Facebook republic. Offensive because WhatsApp is a malleable product and signals wider intentions for Facebook including potentially voice.
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