Facebook/WhatsApp Buyout Considerations

Facebook CEO Mark Zuckerberg and WhatsApp CEO Jan Koum have joined with an impressive $19 billion deal. The two met in February about the deal and Zuckerberg added the incentive of adding Koum to Facebook’s board. The advantage for Facebook is that WhatsApp is used internationally in areas where Facebook isn’t. This will give Facebook a more varied user population with a varied demographic. The deal will give Facebook access to WhatsApp’s 450 million global users. It is not quite clear how this will continue Zuckerberg’s quest to connect the whole planet, but he clearly has a plan.

This acquisition makes Facebook Silicon Valley’s top Dealmaker. They have made large deals before, but the large sum they forked over for WhatsApp makes Facebook the largest dealmaker over the search engine giant, Google.

It will take many steps for Facebook to connect the whole world. WhatsApp is one important step. They have many users in emerging countries like India, Mexico, and Brazil. Next, Zuckerberg may look to chat apps like WeChat, Kakao Talk, and Viper, which are primarily used in China, South Korea, and the Middle East respectively.

Facebook has just spent billions of dollars acquiring Instagram and now WhatsApp. It is unlikely the company will now continue to pursue the ephemeral photo app, Snapchat. Although Zuckerberg has made acquisition offers and campaigned hard for the company before, he is unlikely to continue his pursuit. Beyond Zuckerberg, the co-founder of WhatsApp, Brian Acton has issued some pretty harsh remarks against Snapchat and what the company offers so it is very unlikely a deal will occur.

Investors initially seemed wary of the Facebook/WhatsApp buyout, but after Zuckerberg and Koum spoke the shares went back up. Now only time will tell how the market will respond to this new acquisition.

from Douglas MacFaddin’s Tech Market Page http://ift.tt/1nUlBTN

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Published by: Doug MacFaddin

Douglas Willis MacFaddin was born June 16, 1961 in the Miamisburg Hospital to Patricia Ann MacFaddin and Richard Willis MacFaddin. My mother’s maiden name is Morrison and she is the youngest of seven children who were raised in Lycippus, PA. My father was the second of four children and was a twin. He was raised in the town of Viola, DE. At the time of my birth, my father worked at the Mound Laboratories in Miamisburg, Ohio in research. Mound was an Atomic Energy Commission facility for nuclear weapon research during the Cold War. My mother made a home for our family. My father passed away in 1991 and my mother is currently living in Avon, CT. Doug MacFaddin is the oldest of five children (Doug, R. Stuart, Anne Marie, Megan and Mary (Heather)). I lived in Ohio for two years, spent the next seven years in Murrysville, PA (outside of Pittsburgh), moved to Little Silver, NJ and relocated my senior year in high school to Avon, CT. My four siblings currently live with their families in Avon, CT and are members of St. Ann’s Church. I attended Mother of Sorrows School in Murrysville, PA. In NJ, I attended Little Silver Point Road School, Markham Place School and Christian Brothers Academy (CBA) in Lincroft, NJ for three years. My senior year, I attended Avon High School and I then spent the next four years at Union College, Schenectady, NY. I received a BS in Industrial Economics and graduated in June 1983. While at Salomon Brothers, I was asked to attend a two-week seminar for Public Finance at the University of Michigan in 1986. In Little Silver, I was involved in Troop 126 where I achieved the rank of Life Scout and was both a Patrol Leader and a Senior Patrol Leader. I also was an alter boy at St. James Catholic Church and spent summers a the Ship Ahoy Beach Club in Seabright, NJ and caddying at the Rumson Country Club. At Christian Brothers Academy, I wrestled for the varsity squad for three years. I took second in the districts my junior year and went on to the regionals. I also ran on their cross country team freshman year and was part of the CBA Colt team that hasn’t lost a duel meet since 1973. My senior year at Avon, I won the wrestling States (S). I went on to wrestle at Union College and qualified for the Div III nationals twice (1981, 1982) and was co-captain both years. My senior year at Avon, CT, I also won the States (S) in pole vaulting. It was the first time Avon High School had a state champ in two sports in the same year. During my four years, I earned nine varsity letters between wrestling, track and football. In 1979, I was accepted into The National Honor & Merit Scholars Society. Upon graduating from Union College, I accepted a position at Salomon Brothers Inc in August 1983. I was an analyst in their Public Finance department at One New York Plaza. I lived in Park Slope, Brooklyn and spent the next four years working at Salomon Brothers. As a result of Black Monday, October 19, 1987 the Public Finance Department of Salomon Brothers was jettisoned to conserve capital. By November 1, 1987, I was working at Dean Witter Reynolds in the new Public Finance Department made up of many of my former Salomon Brother’s colleagues. The new Department was located on the 57th floor of 2 World Trade Center.

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