Eipsita Tikoo, PGID 61810016, Session 6, xx words

Newsfeed
Timeline
Privacy
Dont want private chat to be displayed. Default privacy setting = everyone.
Usage of fb started going down and messaging increased. Mau was decreasing even after the
above. Engagement going down. What to do? -> organic growth/r&d/buyout. So insta got bought
by fb just a month before its IPO. $500mn valuation. Zukerberg made it a personal matter and
dealt in a very nice manner. Initially offered 1bn but ultimately paid $750 mn. Hadnt reached full
potential. Still getting funded, so fb continued to non monetize it, so it becomes a part of peoples
daily lives. Provided insta independence to operate as a separate entity. So founders could carry
forward their vision. Then co founders vetted companies who wanted to show ads and then the
revenue model started. Similarly fb had monetized. They also curated content for ads but got flack
for being intrusive. Hue and cry about privacy policy. Image of fb is not transparent and clean.
Acquisition of insta and watsapp has been looked at as acquisition of personal information.

Messaging text +mms/ IMs bbm, imessage, converted text to IM only if youre on wifi
How to generate revenue for messaging service first build networks on both sides, subsidise the
price sensitive side and then monetize.
Make games zinga, Farmville, etc. fermium model. App usage increased 113% yoy in 12 to 13.
75% of smartphone users availed your app of watsapp.
Simplicity, speed and reliability vision for watsapp. Expansion service to be faster than sms
with same reliability. 2014 had watsapp more active users than fb. With strong user engagement.
70% watsapp logged daily v/s 61% fb. Watsapp applealed to younger gen so it could piggyback
for fb. Fb could reach out to other geographies via watsapp. Engage with Asian audience. Knew
that fb entered asia late, but watsapp on time.
Watsapp also focused on products v/s mktg, so there were no ads. Still trying to improve its user
base. Competitor WeChat by tencent (buy games/purchase within games, taxi ordering, stickers),
japan had Line(download free game, purchase within game), viber(no rev, but got purchased by
rakuten for online retailing), telegram (game= wolf)

Rakuten bought viber for $900 mn with a monthly active user base of 100mnn and registered 300
mn.
Whereas fb bought watsapp for $19 bn++ with monthly active users 600mn and registered user
base ??. plus fb came out with its own messenger. So Zuckerberg said watsapp is for real time sms
replacement whereas messenger is for non-real time messages. Different purposes. Google was
also after watsapp and could bid a higher price, but due to personal comfort with zukerberg,
watsapp people went with fb. Valuation is a problem as these are new technologies.
 Eipsita Tikoo, PGID 61810016, Session 6, xx words

Allows fb to continue engagement with audience

Engage younger audience
Diversifies into new way of social networking
Enter new geographies
Data transfer from watsapp to fb.
Defensive move by fb, this company doesnt take over fb or others dont acquire watsapp.
Purchases a worthy competitor.
Cons- fb wants to grow user base and monetise. But no way to do that with fb. No ads. Simple,
speed, reliability. End to end encryption. So they might start charging a minor fee later. Might
cannibalize fb later on. But cant predict that with technology. Can go obsolete. Stringent data
protection rules not followed by fb, same image rubs off on watsapp. Would people be able to
differentiate between watsapp and fb IM.
Fb may not be able to create a more sophisticated messaging service as watsapp, but IM gives
some base. So buys. Messenger has no utility/3rd wheel.
2. create value for shareholders by freemium/ charging after building user base/ games/ stickers/
integration with fbs other acquisition of oculus (VR). So video calling with vr. Enhances total
market value of fb.