Facebook has had a frightening success rate in terms of acquisitions. It has very strategically invested in a myriad variety of companies to supplement its vision. Here's how.
Ever since its inception in 2004, Facebook has rapidly grown in terms of active users, scale as well as revenue generated. As per MacroTrends, the year on year increase in Facebook's revenue has always been more than 10% for each & every year! Such aggressive growth has enabled the American tech giant to sideline resources for quality acquisitions.
THE BLOCKBUSTERS
This section analyses the more renowned purchases of Zuckerberg. It includes social media behemoths like Instagram (acquired for one billion USD) & Whatsapp (its largest acquisition yet for 22 billion USD).
These two platforms gave the parent company access to billions of new users who were not registered on Facebook. It integrated various features of these apps into Facebook which improved the overall user experience & lead to more exposure of the Facebook brand to the overseas users.
The company also acquired Giphy in 2020 for a reported fee of USD 400 million to cash in on the meme trend which has taken social media by storm.
TALENT POACHING
After analyzing the list of acquisitions. I noticed how FB had acquired a variety of companies to just beseech the talent of their talented founders & team of research and development.
One of the earlier examples is Parakey which was acquired for an undisclosed fee in the year 2009. The main selling point was the integration of its very talented programmer co-founders (who are better known as creators of Firefox).
Another similar purchase was of Israeli startup Snaptu whose team was given the responsibility of developing FB's mobile app.
ChaiLabs founder & creator of AdSense Gokul Rajaram also joined Facebook after his company was acquired for USD 10 million. He completely altered Facebook's ad revenue for good.
There are several more purchases in similar ilk like Hot Potato (check-in service development), Octazen Development (two-person programming company) & Divyshot (photo sharing algorithm).
UNDER THE RADAR
There have been some really creative & future tech-based startups that have not received the media hype but deserve every bit of attention.
First up faces .com.. This startup uses facial recognition to automatically identify the face of a user. It does raise concerns regarding privacy & usage for surveillance purposes. But the point I want to stress today is how Facebook incorporated this technology on its application to improve the overall UI.
Another famous purchase was of Oculus in 2014. This company basically focuses on Virtual Reality & its acquisition indicated focus towards the future. According to Mark, the goal was to develop immersive VR gaming and then expand to include all sorts of virtual experiences, including social networking.
Pebbles is another innovative company focusing on 3D gesture interaction. The company was purchased to make FB's hardware & software standout from the crowd & gain traction.
To jettison them even further into the future, Facebook acquired Ascenta in 2014 — just two days after spending $2 billion on Oculus. Ascenta specialized in unmanned aerial vehicles, also called UAVs or drones, and Zuckerberg’s plan is to use them to basically beam free Internet service to the world. Facebook rightly believes more internet access means more potential users. It has focused on building internet infrastructure in Asia & Africa.
Last but not the least is CTRL Labs, a company configuring an interface where users can operate computers by their mere thoughts! This exciting startup was acquired for a princely sum of a billion dollars.
FINAL THOUGHTS
After going through various news cycles about Facebook & its infamous privacy policy, I can foresee an emerging trend.
It seems like Facebook has an excellent talent spotter at the upper levels of its management. The people they have brought in through acquisitions seem to have brought a paradigm shift in their user experience.
The company has a firm eye on the future. buys like Oculus VR & CTRL Labs points in this direction.
Zuckerberg has revealed plans to launch smart AR glasses in 2021 in collaboration with fashion giants Luxottica (maker of Rayban). This is the first such initiative by a major tech company after Google's atrocious attempt in 2015. FB has learned a lot about consumer preferences, product design & privacy policy from Google's infamous attempt. In this instance too, FB teamed up with an industry leader to walk the talk.
Joining the cryptocurrency hype, Mark launched a FB's own cryptocurrency called Libra. This seems like another move keeping the future in mind.
Finally, FB has invested heavily in Indian conglomerate Reliance's JioMart. This digital store will connect users with local small scale grocery stores. FB will integrate WhatsApp (scheduled to launch later this year) giving JioMart access to its 400 million users & Reliance will provide traction to the new service & generate usage.
All these developments bode well for Facebook's future & in my opinion, will ease their transition into the new digital age.
Comments