Acquisition of WhatsApp by Facebook: A Calculated Risk?

Acquisition of WhatsApp by Facebook: A Calculated Risk?
Case Code: BSTR459
Case Length: 19 Pages
Period: 2013-2014
Pub Date: 2014
Teaching Note: Not Available
Price: Rs.400
Organization: Facebook, Whatsapp
Industry: Information Technology, Social Networking
Countries: US; Global
Themes: Mergers & Acquisitions, Growth Strategy
Acquisition of WhatsApp by Facebook: A Calculated Risk?
Abstract Case Intro 1 Case Intro 2 Excerpts

About Facebook

The history of Facebook can be traced back to the early 2000s. Many private schools in the US like the Phillips Exeter Academy published photo directories of their students along with a complete list of their attributes including their class years, friends, and telephone numbers. Mark Elliot Zuckerberg (Zuckerberg), an undergraduate computer science student at Harvard University (Harvard) and a former student of Phillips Exeter Academy, thought of coming up with a digital extension of these directories using the internet. On October 28, 2003, he launched, which used private dormitory ID photographs of students of Harvard. Users were asked to rate two people at a time as “Hot or Not”. However, a few days later, the site was closed by the Harvard administration.

On February 4, 2004, Zuckerberg founded Facebook Inc. and launched a social networking website '' from his Harvard dormitory room. The name of the site was taken from the Photo Address Book of Phillips Exeter Academy, which the students referred to as 'The Facebook'.

The students and faculty of Harvard could sign up on Facebook with an official Harvard email address with their personal profile. Initially, to restrict member listings and thus ensure hardware functionality,.....

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