Facebook is expanding its Product portfolio & diversifying its business model


Facebook LogoFacebook Inc. (NASDAQ:FB) wants to expand its user base, can be the main reason of its latest costly acquisition, to enhance its product portfolio, that basically pushed social media company to acquire popular messaging service WhatsApp for 19 billion dollars. This acquisition, off course will be biggest thing for Facebook, as its reach and communication layers have thicken and spread wider than before.

According to The Verge, between Facebook and WhatsApp, about 1 billion photos and 30 billion messages are sent per day and while Facebook’s Messenger service has not functioned as an essential utility for many, WhatsApp has indeed replaced the need for SMS. Re/Code’s Kara Swisher said that Facebook Inc (NASDAQ:FB) is now a conglomerate, kind of like Disney, owning all the best brands and serving all demographics simultaneously.

The report said that Facebook isn’t only expanding its product portfolio but also diversifying its business model by keeping WhatsApp independent and allowing it to run its 1 dollar-a-year revenue model.

“No one in the history of the world has ever done something like this,” Facebook Chief Executive Mark Zuckerberg said in a conference call on Wednesday. The price tag for the California based company is close to the market value of Hindustan UnileverBSE 0.18 %. India’s most valuable company, TCSBSE 0.59 %, is valued at Rs 4.3 lakh crore, but it employs nearly 3 lakh compared with 50-odd employees for WhatsApp.

In Zuckerberg’s own words, WhatsApp is the only app he’s ever seen with higher engagement than Facebook itself, which makes the deal sensible as user engagement is the prime goal for the social networking giant that recently turned a decade old.