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Social media giant Facebook is no stranger to big acquisitions. He bought Instagram for $ 1 billion in 2012, WhatsApp for $ 19 billion in 2014, and virtual reality company Oculus VR the same year for another $ 2 billion. In all three cases, however, the common denominators were obvious. The deals were all majority control transactions and yielded technology that the world’s largest social network didn’t have or saw as first-rate acquisitions.
Facebook’s latest investment of nearly $ 5.7 billion in Reliance’s Ji Platform for just around 10 percent, then makes the deal an aberration. “This is the largest minority investment by a technology player in India and points to the powerful possibility with the combined market share and user groups of both companies combined,” said an investment banker who has worked on large inbound transactions. . “But it is important to study who gets what from the deal.”
India is among the largest communities in the world for the company with approximately 328 million users. Then Instagram has millions of accounts in India, and the WhatsApp messaging service announced in 2019 that it had 400 million users in India, making it its largest market outside the US. USA
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Without delay, Reliance Jio recently announced that it had the largest subscriber base with around 400 million users. Seen in the big picture, with everything going on in China, which is in any case closed to Facebook, and the growing reluctance to engage in business there, India would be one of the world’s largest ‘user bases not to be it’s completely reaped, “said a technology analyst.
But since the user base of low-cost telecom users and Facebook and Instagram may not overlap, Facebook may be competing for other goals. “Telephone payments will only accelerate in the future,” says Raja Lahiri, partner at Grant Thornton. “The Facebook-Jio partnership could create a gateway that will serve commerce for the future.” Facebook India did not respond if there could be a new messaging system built in the future.
According to a report by Credit Suisse’s partnerships between Jio and JioMart, which is a new business initiative for Reliance Retail, the WhatsApp messaging service would be a multiplier enabler.
Facebook’s entry into India has seen the company do things differently than other markets. The model changed here because users first accessed Facebook on a phone rather than a desktop computer, making mobile the cornerstone of their strategy.
In 2012, Facebook launched in local languages like Hindi, Gujarati, Tamil, Malayalam, Kannada, Punjabi, Bengali, and Marathi and more. However, that has not meant that the company has been able to monetize the market as much as it would like. The digital advertising pie in recent times is valued at Rs 13.7 billion (2019) with Google and Facebook reaping around 70 percent of that. Industry executives estimate that Google earns most of that portion.
Facebook, which was advised exclusively by Bank of America for this transaction, has not invested much in India in the last eight years since it got here. According to the analyst quoted above, “There are no large development centers in Bangalore, nor an R&D office for cutting-edge technology,” which makes their sudden and large investment suggest some recovery is underway. Meanwhile, social media companies like Chinese-owned TikTok, which require their users to own nothing more than a phone, have logged billions of downloads with more than 20 million active users and more time spent on it.
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Clearly, Facebook’s WhatsApp Pay payment platform, which attempted a rollout in the past year and was unsuccessful, would serve to offer an immense business advantage when combined with the way retail is ready to operate if it gets authorizations and permits in the near future.
WhatsApp Pay has been struggling for regulatory approval, even as others like Google Pay have overcome similar obstacles and continue to operate. It is also not a secret that some of the first Facebook plays like Free Basics in 2014, which was a move to offer free Internet but went against the principles of net neutrality and ran into a brick wall with the Government of India, which ruled against him. .
Facebook founder Mark Zuckerberg is known for telling his managers to take “the hacker way” or “move fast and break things.” Time will tell if this is the great movement that will take Facebook to break new ground.
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