This blog post is on Facebook acquisitions, and in large part a reaction to this infographic. My findings are based on an evaluation of the infographic illustrating a timeline of app acquisitions by date, and for the dollar amount purchased. I conclude that as of 2012, Facebook has taken measures to remain ahead of the competition in mobile apps and in new markets. Through it’s app purchases, we can see that it is positioning itself to be a leader in the world of virtual reality.
Facebook spent over $23B on apps!
The infographic illustrates that from 2005 to 2016 Facebook spent a total of $23,124,700,000 -more than the GDP of Fiji, Zimbabwe and Maldives combined on the acquisition of 60 apps! The year 2012 seems to have marked a new phase in Facebook’s purchasing decisions, through the purchase of apps for billions of dollars. It acquired Instagram for $1 Billion, in April 2012, the first of apps bought in the billion dollar range. WhatsApp, a messaging app was purchased in February 2014 for $19 Billion, and Oculus VR, a virtual technology app was purchased for $2 Billion in March 2014.
World Domination! Mouahahahaha!
According to an article in The Atlantic “Facebook wants to dominate in the three areas WhatsApp excels in: apps, messaging, and usage in the developing world. John Herrman from Buzzfeed (Meyer, 2014) said it is “one of the only services that could plausibly claim to be cannibalizing Facebook on a large scale, and one of a small few that pose it an existential threat.” According to Meyer (2014) three reasons why the purchase of WhatsApp fits into an emerging pattern of Facebook’s are (1) to dominate mobile apps, (2) dominate messaging apps, and (3) dominate the developing world.
An example of Facebook buying apps when they start to dominate are the purchase of Instagram in 2012 for $1B, and unsuccessful bid to buy Snapchat for $3B. Messaging apps can compensate for slumping news feed usage, and they are “one of the few parts of the social web that grew over the past two years.” (Meyers, 2014). As for wanting to dominate the developing world, the argument is that they may have maxed out its membership among U.S. users. WhatsApp has seen huge growth in the developing world.
Facebook paid $85M -little in comparison to other purchased apps, for Parse which is “a cloud company that hosts backend services for app developers.” (Edwards, 2013). Because Parse hosts backend resources like analytics, for mobile apps, it can see if apps are growing or not, and before anyone else knows about it, allowing Facebook to acquire other apps that could be a threat before they turn into one. Apps that are hosted by Parse are more likely to be acquired in this manner. The purchase of Instagram for $1B was considered to be one of Facebook’s smartest acquisitions ever in consumer tech (Luckerson, 2016).
Facebook was unsuccessful in acquiring Snapchat and has been trying to copy. The latest example of this is, according to Mathew Ingram (2016) “when Facebook-owned Instagram introduced a new feature called Stories that lets users share a collections of photos and videos that disappears after 24 hours” which is identical to Snapshat’s Stories.
When one looks at the apps in the infographic it does not bring ease to the privacy valuing individuals. Of concern to those who value their privacy are: Face.com, a facial recognition Platform, purchased for $100 Million in June 2012, Jibbigo, a speech recognition and speech-to-speech translation app which translates voice snippets to and from 25 languages, (Constine, 2013), purchased for an undisclosed amount. Wit.ai is another speech Recognition app that was purchased for an undidsclosed amount in January, 2015.
With regards to Facebook’s virtual reality endeavours, it purchased Two Big Ears in May 2016, which is an app to support virtual reality audio and build ultra realistic 3D audio, mainly to support the virtual reality app Oculus VR (Matney, 2016) which Facebook purchased in May, 2014. Surreal Vision and Pebbles Interfaces are two augmented reality apps purchased in May and July of 2015.
In conclusion, Facebook is well poised to dominate the apps market thanks to it’s purchase of mobile analytics apps, such as Parse, which allow it to monitor startup apps and purchase them before they become major competitors, such as Instagram and WhatsApp. WhatsApp’s purchase of $19B vs Instagrams purchase of $1B is telling, that messaging is still more widely used and has greater reach in the global market/developing world. Out of the just over $23B spent on the acquisition of over 60 apps, over 80% of that was spent on the acquisition of WhatsApp alone! Facebook is maintaining it’s dominant position in the next big craze, virtual reality through it’s purchases of virtual reality apps. If ever anyone wants to make millions or even billions, I would recommend they use a backend user which is owned by Facebook, such as Parse so that Facebook can monitor its performance for a potential purchase.
What do the trends in #Facebookacquisitions say about the future of #socialmedia? Click here to find out: (http://ow.ly/xxxxxxxxx) #AI
In just over 10 years, facebook has spent approximately $23B on the aquisition of over 60 apps, including Instagram and WhatsApp, and even virtual reality apps. Find out more: (http://ow.ly/xxxxxxxxx)
Constine, Josh. August 12, 2013. Facebook Acquires “Mobile Technologies”, Developer of Speech Translation App Jibbigo. Tech Crunch. https://techcrunch.com/2013/08/12/facebook-acquires-mobile-technologies-speech-recognition-and-jibbigo-app-developer/
Edwads, Jim. September 6, 2013. This Guy Thinks A Little-Noticed Facebook Acquisision Gives It A Head Start On Finding The Next Instagram. BusinessInsider. http://www.businessinsider.com/why-facebook-acquired-parse-for-app-acquisitions-2013-9
Ingram, Mathew. August 2, 2016. Here’s Why Facebook Is So Desperate to Buy, Copy or Kill Snapchat. Fortune. http://fortune.com/2016/08/02/facebook-snapchat-2/
Matney, Lucas. May 23, 2016. Facebook just bought VR audio company Two Big Ears and is making their tech free to developers. Tech Crunch. https://techcrunch.com/2016/05/23/facebook-just-bought-vr-audio-company-two-big-ears-and-is-making-their-tech-free-to-developers/
Meyer, Robinson. February 19, 2014. Why Facebook Just Spent $19 Billion on a Messaging App. The Atlantic. https://www.theatlantic.com/technology/archive/2014/02/why-facebook-just-spent-19-billion-on-a-messaging-app/283959/