Facebook is coming off its highest stock price since… Well, ever. After hitting the $100.00 per share mark last week Facebook’s value was around $230 billion earlier this year (Pre $100.00 per share). Facebook bought WhatsApp for $19 billion in 2014 and saw WhatsApp’s potential with its 450 million users. Now WhatsApp has grown to 900 million users, so whatever Mark Zuckerberg saw was very clear.
Facebook is becoming a behemoth. In a few ways Tim Cook and Mark Zuckerberg are very similar people when it comes to how they view competition and the importance of mergers and acquisitions. Cook and Apple bought Beats from Dr Dre in 2014 for $3 billion. Zuckerberg and Facebook bought Instagram in 2012 for $1 billion absolute bargain. Facebook has also bought WhatsApp and Oculus in 2014. Oculus was bought for $2 billion.
What do a photo sharing app, an international instant messenger app, and a virtual reality video game company have in common with Facebook? Well if you break it down like that each one compliments a part of Facebook. Instagram with the photo’s uploaded, WhatsApp is like Facebook’s Messenger, and Oculus provides the option of virtual reality with not where Facebook’s position is today in social media’s intensive media sharing, but for where Facebook could explore going in the future.
Now how does Square come into play? if you think about how careful Facebook has bought the companies it has acquired, one could definitely see why Square and Facebook would be a perfect match. The prices Zuckerberg paid for Instagram and Oculus for the “bargain” billion and two billion dollar respectively make Facebook a visionary company to go shopping at the dollar store for billion dollar private companies in the lower range but could provide value down the road. WhatsApp could be considered a bargain for the $19 billion paid based on how many users it had at the time and how many Facebook not only projected but also guessed right to how many it has grown too.
Square is founded and run by Jack Dorsey, who also founded and is back as the current CEO of Twitter. Square filed for its IPO on 11/06/2015, and it came in lower than most expected… $2 billion under to be exact. This could be a play for Facebook, or any other large company with a lot of dollars to spend because of the low valuation. A mobile payments platform is what Facebook should turn to for its next acquisition. Square would be a perfect fit for Facebook for not where it is right now, but again where it could go. Having payments processed through Facebook should be something seen as a way to get users to have one-stop platform to do everything.
This could be seen as a conflict because Facebook is a competitor of Twitter, of which Dorsey also runs. But that could be taken out of his hands once Square goes public. Dorsey will probably stay with Twitter as CEO for the long term, because the task of trying to lift two separate companies from slow revenue growth problems will be too hard to handle all at once and he could probably do better with Twitter anyway.