It has been hard to miss the news that Facebook is buying WhatsApp for a whopping sum of $19 billion. Large deals in the mobile and tech industry are nothing new but this one plays in another league.
Facebook has defended the deal, citing the huge potential, popularity and value of the messenger service that WhatsApp is providing. Even if WhatsApp only has been on the market for a few years, they currently have around 450 million users and growing exponentially, where the goal is to achieve 1 billion users.
WhatsApp has built its brand without any marketing or advertising activities. Instead, the objective has been to develop a direct relationship with its users and avoid clutter. The company has not collected any personal information from its users except from their phone number.
That is a quite different strategy from Facebook who has been forced to focus more on advertising revenues, meaning they need to collect personal data from their users. This is something that has turned away some users from Facebook and might be a worry now also for the users of WhatsApp. However, just like Instagram – that was bought by Facebook in 2012 – WhatsApp will continue to operate independently with its own brand, strategy and HQ.
So what is the brand strategy behind buying WhatsApp?
Facebook has previously bought more than 40 companies, mainly small start-ups who provided great talent or interesting features. The acquisitions of Instagram and WhatsApp are different. It seems like Facebook is now aiming to build a portfolio of market leading brands with large potential that offer services that are complimentary to Facebook and who already have a large user base. This is a similar brand strategy to the big FMCG companies like P&G, Unilever and Nestle who all focus on building “House of Brands” consisting of successful and independent brands that supports their overall vision.
Being able to offer strong brands like Instagram and WhatsApp will support Mark Zuckerbergs vision of “making the world a more open and connected place, offering engaging and outstanding services”.
It will be interesting to see what brand will be the next one in the Facebook family.