With the evolution of global commerce, Acquisitions have become an integral strategy for organisations seeking diversification, high growth, value creation, cutting-edge technologies, and a strategic lead. Acquiring different companies from these tech giants allows its product range to expand, eliminates competition, permits easy entry into new or foreign markets, and curtails costs by buying businesses that feed into its supply chain. Facebook has also followed an acquisition strategy to broaden and extend its user base, acquire new capabilities, and elevate its dominance within the social media market.
Table of Content
- List Of Top 5 Startups Acquired Owned By Facebook/Meta
- Potential Acquisitions: Strategy
- Compatibility With Facebook’s Vision
- Benefits Of Acquisitions
- A Chance To Diversify
- Brings Revenue Synergies
- Allows Economies of Scale
- Spurs Business Growth
List Of Top 5 Startups Acquired Owned By Facebook/Meta
Meta, earlier known as Facebook, has acquired more than 90 firms through notable deals. These are five important startups that Meta owns:
Type of Business: App for sharing photos and videos
Acquisition Cost: $1.0 billion
Acquisition Date: April 9, 2012
Instagram is a well-known social media site for sharing images and videos that was introduced in 2010. In 2012, Meta invested $1.0 billion to acquire Instagram after realising the platform’s potential for development and income production.
Type of Business: Messenger Service for Mobile Devices
Acquisition Cost: $19.0 billion
Purchasing Date of Acquisition: February 19, 2014; Cost: $19.0 billion
Founded in 2009, WhatsApp provides messaging and calling services all around the world. In 2014, Meta invested $19.0 billion to acquire WhatsApp, drawn by the latter’s substantial user base and quick expansion..
- Oculus VR
Type of Business: Technology Company for Virtual Reality
Acquisition Cost: $2.0 billion
Acquisition Date: March 25, 2014
In 2014 Meta acquire Oculus VR, best known for the Oculus Rift device, for $2.0 billion. With this transaction, Meta officially joined the virtual reality space.
- Onavo
Type of Business: Web analytics for mobile devices
Acquisition Cost: $100–200 million (estimated)
Acquisition Date: October 2013
Established in 2010, Onavo offered web analytics for mobile applications. In 2013, Meta invested a roughly of $100-200 million to acquire Onavo, leveraging its technology to gain strategic insights.
- Beluga
Type of Business: Messaging service
Acquisition Cost: Undisclosed
Acquisition Date: March 2, 2011
Meta purchased the chat app Beluga in 2011. Through the acquisition, Meta was able to improve its communications capabilities and get rid of a possible rival.
The aforementioned acquires have significantly contributed to Meta’s growth and diversity of services, bolstering its standing within the digital arena.
Facebook purchased Divvy shot to simplify the uploading of photos for its followers. Facebook procured Beluga to upgrade its messaging potential along with the startup’s talent and innovation.
Potential Acquisitions: Strategy
Facebook has made forays into new segments, which favours its revenue generation. It purchased Live Rail for its strong tech team and platform, which supports its brand compatibility. The acquisition of Atlas Solutions from Microsoft has helped Facebook expand into the AdTech space, plan improved ad campaigns, and benefit advertisers. The acquisition of Ozlo helped Facebook create highly engaging AI-driven experiences with Messenger, and another computer vision startup, Zurich Eye, has become a unit of Facebook Oculus VR Zunich and works on the latest advanced solutions for virtual reality glasses.
Forecasting the potential acquisitions of startups by Facebook is difficult, as various factors come into play. These include compatibility with their business goals, strategic importance, market conditions, and financial analysis. Some potential acquisitions that Facebook can make are those startups that deal with innovative technologies or product lines that align with its business objectives and strategy.
For its sustained growth, Facebook can include in its potential acquisitions startups dealing with payment processing or virtual goods to permit smoother payment for its users and improve their monetizing potential,
Facebook can also acquire startups focusing on setting up new technologies in artificial intelligence, social or digital media, or virtual and augmented reality. They may also be looking for startups that have created successful services or products that can add value or complement their present offerings, such as advertising platforms, applications or tools related to social networking, or e-commerce tools or technologies.
As Facebook intends to promote virtual reality growth, it needs a unique active motion platform for virtual reality like Virtuix Omni. This one-of-a-kind omnidirectional treadmill can be employed for gaming, wellness and health applications, education, simulations, or physically walking through any location on earth. Since Facebook has purchased high-user-based companies like WhatsApp and Instagram, they can acquire Pinterest, Slack, or Snapchat.
Acquiring Quora and Stackoverflow will help obtain answers and share information and knowledge on Facebook.
Compatibility With Facebook’s Vision
The acquisition strategy of Facebook shows compatibility with its vision of buying the best teams along with their data and innovations and forging permanent relationships with them. These enabled the acquired company to obtain a fairer price and realise their mission objectives of working together.
Facebook believes in getting its deals completed quickly before other companies eye them and do not end up investing more. Zuckerberg’s acquisitions focus on bagging great companies and founders and sharing a common vision for both.
Benefits Of Acquisitions
Acquisitions of startups offer these immediate benefits, namely:
A Chance To Diversify
Whether geographic or in any other way, acquisitions make it valid for a company to diversify and become a global conglomerate through product innovation.
Concerning location, Facebook may consider acquiring startups from various regions across the world based on the talent and opportunities present. Previously, Facebook acquired startups from different locations, such as Europe, the United States, and Asia. Facebook also acquired Hot Potato due to its facility to permit users to “sign in” to locations.
Brings Revenue Synergies
A well-planned acquisition deal can bring revenue synergies through cross-selling of products as well as cost savings. Moreover, acquisitions also affect operational synergies, wherein the merged company functions more productively.
The acquisition of Instagram by Facebook enlarged its user base, increased engagement, and improved the overall user experience. The outcomes achieved by the two companies surpassed what they could have achieved individually, highlighting the effect of synergy. Facebook provided a strong infrastructure that allowed Instagram to scale rapidly, merging its strengths to form synergies.
Allows Economies of Scale
Usually, the higher the volume of production, the lower the unit cost. Considering this logic, scaling lets companies leverage bulk purchases with their business associates and suppliers, thereby aiding in lowering their unit costs.
Facebook is solely operating digital ads on its channel. Acquiring a company such as Adsemble would allow it to enter billboard advertising without possessing any billboards. It would control the proprietary technology and platform to self-build digital ads on different platforms, as well as billboards. This would create a digital medium that can rotate ads with no expenses on printed billboards, making it a trendsetter.
The open display system of Adsemble automates the purchase of billboards. Purchasing it immediately will enable Facebook to acquire Adsemble or a similar company for nearly $20 million, which is a paltry sum for them. Delaying would make it an acquisition of $100 million.
Spurs Business Growth
Acquisitions promote business growth and add to value creation. It helps to fill product or service gaps, make forays into new markets, raise their market share, and acquire intellectual property, technology, and talent at a lower cost, augmenting revenue.
Facebook, with a subscriber base exceeding 2.7 billion monthly, is an effective tool for business advertising and reaching a vast audience. Facebook’s combination of tricks and tips enables you to grow your business.
On the whole, acquisitions bestow advantages for both parties. It also benefits smaller companies or startups by allowing them to grow faster at a lower cost. The startups enjoy growing demand for their products and facilities, and collaborating with an acquirer helps them operate within a larger ecosystem. At times, the integration of the startup’s technology into the solutions of the top corporations creates joint innovative market strategies that boost the market reputation of the startups.
Other advantages that accrue to both companies are the identification of capabilities by the acquirer and the startup’s access to these capabilities. Moreover, the acquisition also benefits startups by allowing them to gain access to capital for future expansion along with the acquirer’s assets and operational units.
The right acquisition strategy can help tech giants like Facebook maintain their market dominance, cope with competition, generate revenues, and synergize services with connectivity. Facebook’s strategy has been to procure likely competitors before they become big opponents. These acquisitions have benefited Facebook by enlarging its user following and making it a major social media player in the market. Potential acquisitions can be helpful for Facebook in integrating them to consolidate their business in the long run. Anything that caters to a vast section of the population in business terms can figure in the potential acquisitions of Facebook based on its prospects, compatibility with its business model, and long-term benefits.
FAQs on Startups Acquired By Facebook /Meta
These acquisitions provided Facebook/Meta with innovative technologies, talented teams, and access to new user bases, strengthening its position in the market.
Facebook’s biggest acquisition to date is WhatsApp, a mobile messenger service, which it acquired for a staggering $19.0 billion.
Yes, challenges included integrating the startups into Facebook/Meta’s ecosystem, maintaining user trust, and navigating regulatory scrutiny.
The acquisitions provided startups with resources to scale their operations, accelerate product development, and reach a wider audience. However, some faced challenges in maintaining their independence and identity within Facebook/Meta’s ecosystem.
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