Have you been wondering why Facebook paid $19bn for a messaging app last week?
A few theories abound:
- A defensive strategy amid the increasingly complex and competitive battle for attention being fought by all social networks
- Access to Whatsapp user data, specifically mobile phone data and contacts (another layer of network data for Facebook to mine for things like People You May Know perhaps)
- An emerging market strategy - Whatsapp is big in the developing world where SMS services are expensive
It wasn’t a technology acquisition as Facebook already has something very similar and as Whatsapp is pretty much a clone of the messaging services that preceded it like BBM.
And it wasn’t a case of kindred spirits, which is pretty much how Facebook have been messaging the deal.
I think the reality is that its a combination of the above - it would have to have value on multiple levels to justify that level of investment.
I think that Facebook’s acquisition strategy has some built in risk.
Firstly, it shifts the focus away from innovating to integrating.
Second, it creates fiefdoms within Facebook with product teams and people dis-connected from the core platform.
Thirdly, it’s defensive and that can change the tone of the leadership team and influencing strategy long term.
Overall… interesting times.
Share you theories in comments below.