Facebook buys $1.5 billion trillion this year to tap into the electricity business

Facebook is looking into new areas such as e-commerce as it looks for acquisitions on its social networking platform, Beijing time, July 3 morning. The company has spent 1.5 billion dollars on acquisitions this year, compared with just 68 million dollars last year.

Or become a developer competitor

Facebook has long claimed that the company provides a platform for software developers to help their applications be used by more users. There are already Bai Wan apps on the Facebook platform, including Zynga games. But the recent deal to buy Instagram and Karma suggests Facebook is targeting application developers on social networking platforms, making Facebook a direct competitor for other application developers.

"Facebook is moving forward and our ecosystems are moving forward," says Amin Zoufonoun, head of corporate development at Facebook, Aiming Zovnon. He points out that there are more innovative companies on Facebook, and Facebook is interested in these companies.

This is a strategic issue for Facebook. How will Facebook take advantage of the business opportunities offered by social networking ecosystems without impacting developers ' relationships with the company? Facebook's consideration of acquisitions may be a motivator for some entrepreneurs, but it could also lead many developers to leave the Facebook platform.

Facebook has to make such choices as Facebook tries to profit. Facebook is very concerned about the commercialization of mobile sites, which currently have limited advertising opportunities. In this regard, Wedbush analyst Michael Pacht Michael Pachter that Facebook's acquisition of application developers on the company platform is a "strategic mistake".

Wrapp offers similar services to karma. Hjalmar Windbladh, founder of the company, Hamar Windbrad that the company is watching whether Facebook will be involved in a similar business to developers on the platform. "There is no doubt that I want Facebook to remain a platform to help developers like us succeed," he says. If the developer is threatened, Facebook's time as a platform will be gone. ”

Focus on improving the user experience

A Facebook spokeswoman said the company is considering acquisitions to supplement the company's core offerings, but Facebook will continue to support and develop the application and developer ecosystem of the Facebook platform. Instagram and Karma Use the Facebook Connect login service, so users ' activities on these sites will be reflected to Facebook.

Zovnon says Facebook will not aim at every small company on its platform, but focus on companies that can improve the Facebook user experience. Facebook is paying particular attention to acquisitions in the mobile business, which will help the company improve its mobile apps. "We are building capacity to provide a more interesting mobile experience," he says. ”

Facebook bought Karma in May, and the company launched its services on Facebook last year. The acquisition has enabled Facebook to have a source of revenue in addition to advertising and transaction fees. Karma Mobile apps will alert the user when a friend's birthday or some anniversary is coming. Users can then buy gifts, such as red wine or chocolate, to be presented to friends. Karma cooperates with these gift providers and obtains a 20% to 50% split from the transaction.

Zovnon did not disclose what Facebook planned for karma, but the move suggests Facebook will be involved in the e-commerce industry. Herman Liang Herman Leung, analyst at Haina International, recently estimated that by 2014, a gift-giving service to friends would bring Facebook up to $872 million trillion in revenue, while Karma was the right target for Facebook.

Involved in the E-commerce industry

In addition to Karma, Facebook bought 4 other technology companies this year, reflecting the strategic transformation of Facebook. Earlier, most of Facebook's acquisitions were aimed at acquiring talent, but Facebook is now starting to acquire technology to take advantage of new opportunities in industries such as e-commerce and business services.

Of the 5 tech acquisitions that Facebook has made so far this year, the most interesting is Facebook's deal to buy mobile photo-sharing services Instagram about 1 billion dollars. Facebook announced the deal in April, a deal that significantly strengthened Facebook's mobile business.

Facebook's deal to buy Tagtille, Glancee and Face.com has not received much attention. Tagtille provides consumer integration services, GLANCEE is a location-based social application, while face.com is a facial recognition software developer. Zovnon declined to disclose Facebook's plans for a recently acquired company, but these acquisitions have opened up new markets for Facebook.

Tagtille may be another attempt by Facebook to enter the E-commerce market. The company offered a small box to the retailer. With this equipment and tagtille applications, consumers can sign in and earn points in stores. The merchant can track the user, and use the Tagtille system to send customized preferential information directly to the user's mobile phone. This equipment is free of charge and the merchant needs to pay the service fee every month. For Facebook, the acquisition is useful if it wants to provide more mobile services to local businesses.

In the past, Facebook did poorly in its new business. Last August, Facebook abandoned its 4-month group buying service. The company spokesman said at the time that Facebook thought it was important to focus more on the core social experience rather than the group buying service.

Acquisition spending has risen sharply

So far this year, Facebook has made 11 acquisitions, costing more than 1.5 billion dollars. Facebook last year spent 68 million dollars on acquisitions. Facebook has more money after financing 6.8 billion of billions of dollars through an IPO this May. Currently, Facebook holds about 11 billion dollars in cash and 5 billion of billions of dollars in credit letters.

Zovnon does not rule out that Facebook will continue to carry out a massive deal of $1 billion trillion, but says it is uncertain how many such acquisitions Facebook will make. "In different situations, we may be doing a big deal like Instagram, but it's hard to predict." ”

To be sure, Facebook will still have a strategic takeover. "As we evolve, as Karma and Instagram lead us in a new direction, we will have other opportunities in the future," says Zovnon. ”