Product details

Matured Facebook was on a shopping spree for acquisitions to enhance its cool quotient among young users who were drifting towards mobile applications in large numbers. In quick succession, it had announced that it would buy WhatsApp, the mobile messaging service for $19 billion and Oculus VR Inc, the leader in virtual reality technology for $2 billion in 2014. These acquisitions were intended to give Facebook access to the next billion users in developing nations through their mobile phone numbers and it would also help Facebook gain a foothold in the gaming industry. Facebook was playing a long game as its future depended on utilisation of the data obtained to know the digital behaviour of its users in order to improve its intelligence, accuracy and price of the products advertised on its varied platforms. But the dilemma faced by Facebook was to monetise its acquisitions effectively, without alienating its users. Its ‘opt-in sponsored content’ and ‘context-specific suggestions’ were considered as ‘organic’ as it would provide a new revenue stream for Facebook through WhatsApp and oculus VR acquisitions. Facebook had diversified its portfolio and these acquisitions were a hedge for its future. Analysts had argued that these acquisitions were a desperate move by Facebook by disturbing its business model in order to monetise and not by creating capabilities. The case study will attempt to analyse whether the acquisitions of Facebook would be fruitful in the long run and help in retaining its cool factor.