Facebook Inc.'s Deals with Whatsapp

Facebook Inc.’s Deals with Whatsapp Name Institution Date Highlight (bullet points) 2-3 reasons why/why not this deal makes sense for Facebook Inc This deal not making sense because * WhatsApp's operating margins are very small, and it should not cost $19 billion. Apparently, very few know WhatApp's operating margins. The indications are that the company turned a profit on its rumored $20 million in revenue. Arguably its single biggest expense is the 30% it pays Apple and Google to distribute its app. There are surely storage and bandwidth costs as its customer base grows. And keeping the software fresh requires some engineering talent. * The other real problem with the deal is the flawed underlying strategy. Buying WhatsApp does not solve Facebook's real problems, which involve buildings a bigger audience to attract more advertisers, learning its audience's wants and desires to attract more advertisers and keeping its audience engaged to attrac...