Analyzing Facebook's 2013 merger strategy with data

Facebook's 19 billion dollar takeover of WHATSAPP has attracted a lot of attention, but there's not much to be surprised about the deal except price. In fact, since 2010, Facebook has never stopped mergers and acquisitions.

On average, Facebook buys 9 companies a year, mainly to expand its talent pool and promote its products. But unlike Google's acquisitions in various areas, Facebook's acquisitions are focused on expanding and optimizing its core business in the social arena.

The potential acquirers are concerned about the transparency of Facebook's merger strategy. The international market, new social groups, a large number of users and potential income are the determinants of market competition. And as WhatsApp shows us: money is not a problem as long as there are enough users.

With Oculus VR and WhatsApp under their wing, this year could be the biggest acquisition in Facebook's history. Exitround analyzed Facebook's 2013-year mergers and acquisitions based on existing public data and SEC documents, and produced a report.

Policy

All 2013 of Facebook's acquisitions are aimed at boosting core competencies and acquiring new users. Mergers and acquisitions are mainly in three areas: social and gaming, mobile social analysis, mobile service platform.

The WhatsApp deal is a good way to demonstrate Facebook's strategy, with 500 million active users and more than 350 million active users, who are growing faster than any social application in history (including Facebook itself), WhatsApp users ' organic , rapid growth is also spreading to emerging markets, including Russia, Mexico and Brazil, which also means more new users and new revenue in the future.

Although the recent mergers and acquisitions are to strengthen the user's daily interaction and communication, SportStream is pioneering a new field. Sports News is secondary, and getting more and better data in the shortest possible time can help Facebook predict user behavior and generate more advertising revenue.

Spending

Only three of Facebook's 2013-year deal released the amount of acquisitions, each at around 100 million dollars. The Advertising technology platform's acquisition price is between 50 million and 100 million, the mobile development backstage service provider buys for 90 million US dollars, the Israeli start-up company's acquisition price is 150 million dollars. On the contrary, most other deals are priced below $50 million trillion or have not yet been completed.

Facebook's most generous acquisition. However, Oculus and WhatsApp have broken the record, and 2014 's purchase price may continue to climb.

Products and Talents

The main purpose of Facebook's 2013-year merger is to get talent and products. 5 of the 9 acquisitions were for talent, 3 of them not yet completed. The only company to keep the team unchanged after being acquired was the mobile development backend service provider parse from the San Francisco Bay Area. With more and more people using only mobile devices to surf the web, parse could be a recipe for Facebook to deal with Android and iOS. By allowing the parse team to develop independently, Facebook may soon have a competitive platform. New technology could also be a new competitive edge for Facebook. Zuckerberg has said to the future platform:

Mobile is today's platform and we are now starting to prepare for the future. For me, the most exciting platform for the future is to visualize or change what you see and create a better experience. Today's acquisition (Oculus) is a bet on future calculations.

As you can see, Facebook's strategy is to better understand how users get social information and how to connect, both now and in the future.

The average Facebook company bought was 4 years old.

Number of employees

Location

Facebook's acquisitions were mostly concentrated in the United States, with only 2 of the 9 companies bought in 2013 overseas, Israel's mobile data monitoring platform Onavo and the UK's code leak-checking software developer Monoidics. But even Monoidics has offices in Seattle. Although emerging markets have great potential, Facebook prefers to buy local companies. More interestingly, even within the United States, Facebook is more willing to buy the San Francisco Bay Area company, probably because the Bay Area's companies seem to be more carefree and likely to sell at a premium.