How Acquisitions Helped Facebook Inc (FB) To Reach Where It Is Now?
Being a reigning player in social networking space, Facebook Inc (NASDAQ:FB) has never limited its vision but has expanded in each and every aspect related to the field. Right from acquiring Parakey in July 2007, Facebook’s pursuit for valuable businesses has not ended even after its recent WhatsApp deal worth $22 billion, or Occulus Rift deal.
It is not the case that Facebook Inc (NASDAQ:FB) went on a shopping spree only to help improve its user’s experience, but the objectives were far higher than the usual. Firstly, Facebook is a talent hungry organization, which keeps adding skilled personnel onto its board by way of takeovers.
Secondly, the company systematically eliminated the potential competition by including the competitor under its roof. Thus, for Facebook, mergers and acquisitions are a smart way to take care of multiple things right from scaling up its user experience to keeping off competitors at bay.
Thanks to this strategy of Facebook, because of which its users have been able to experience a new feature now and then on their very favorite social platform. The benefit is equal to those who accepted to merge with Facebook. Otherwise, it would have been impossible for these sharp and brilliant start-ups to reach millions of users without the Facebook platform.
Impeccable Acquisition Strategy
When Facebook Inc (NASDAQ:FB) got hands on WhatsApp deal, the world was astonished at the deal valuation that ran up to $22 billion. But, a closer look reveals that the terms of the deal were just $4 billion in cash while remaining $15 billion by way of stocks. Smart executives use their high price stocks for acquisition as opposed to cash.
Thus, the social networking site, led by CEO Mark Zuckerberg, knows exactly what to serve on a platter. There is a shadow of doubt if competitors Twitter Inc (NYSE:TWTR) or Microsoft Corporation (NASDAQ:MSFT) could have monetized the Facebook acquired businesses with such perfection.
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