Since the social network's notoriously generous purchase of Whatsapp, the internet is rampant with speculation over where Facebook will go from here. Over the years, Facebook has acquired or merged with some 40+ companies. Of these, the purchase prices are known for only some, as there are cases where disclosure is not legally required and where one of the parties does not wish figures to be released. Of the known figures, we have compiled Facebook’s biggest purchases to date. From other known figures associated with the various other purchases, we can tentatively estimate that these are indeed some of the very biggest - but, as with so much else, only Facebook has all the data.
We probably don't need to tell you that Facebook, now a decade old, was co-founded by current CEO Mark Zuckerberg and partners. Many have seen the movie The Social Network, which recounts the company’s beginnings from inside a Harvard dorm room. It was originally designed to be a network for Harvard students only, but was later extended to include other ivy league schools, then all colleges and universities, and finally, in 2006, anyone over the age of 13. The social networking site has had tremendous phases of rapid growth since it's become globally accessible. However, over the last couple of years things have slowed down and many surmise that some of these latest acquisitions have been intended to breathe new life into the site.
The social network giant has been swooping in with fat cheques and attractive packages, setting its sights on every hot new cyber commodity and often successfully nabbing them to strengthen the Facebook conglomerate. Of all the companies Facebook has purchased to acquire new technology, software or merely a company’s talent, some have gone for hundreds of millions - and even billions. But which have been the biggest beneficiaries of Facebook's loose wallet? Game, set, match? More like: Like, Comment, Share.
5 Face.com: $60 million
This company with top-of-the-line facial recognition software was bought by Facebook in June, 2012. Originally founded in 2009 and based in Tel-Aviv, this 10-employee company has been moved to California’s Menlo Park. By 2011 the software had identified 18 billion faces across API (Application Programming Interface) and Facebook platforms. Since the deal, Face.com has released two apps for Facebook: Photo Tagger and Photo Finder. The former is self-explanatory. The latter (if you're unfamiliar with it) lets users search for photos of themselves they may not know about that have already been published on the web, and then, of course, tag them. One of the most obvious benefits of this is the ability to locate unauthorised photos of yourself. Maybe your face is being used in an unpleasant way; an ex-boyfriend is being a jerk, or bullies at school are playing a mean trick. Face.com's software is a step ahead of the game. The question now is, can Facebook be stopped? Face.com’s website, under Facebook’s purview for almost two years, is down, with a note saying, “Coming soon.”
4 Atlas: $100 million
Facebook acquired Microsoft’s Atlas Advertiser Suite in February, 2013, for “around $100 million.” Atlas is a company that tracks what people do after seeing particular ads—whether they act immediately, going to the ad company’s site, whether they go online a few hours or a day later and make a purchase, or even if they “add to cart,” but do not follow through. How’s that for Big Brother? The technology is referred to by Atlas as “Click Purchase Path Analysis.” What Facebook is really buying is the technology and rights to Atlas’s particular formula.
Now, the parent company could increase its own ad revenue across the web, measuring the success of their ads to optimise their targeting. Facebook said that was not its intent—they plan to use the tracking technology to help corporate sponsors analyse how their ads fare on Facebook as compared to other sites. Sounds pretty altruistic. If Facebook discovers a company’s ad does better somewhere else, will they really disclose this, and how would the sponsor know if they didn’t? Perhaps the statistics can help improve the ads themselves, telling designers how to better target them to a specific audience based on performance elsewhere. The fact remains, though, that Facebook now owns the highly sophisticated and somewhat intrusive technology. Whatever they said they would do with it is moot — it’s theirs to use. Should we be re-checking those terms and conditions?
3 Onavo: $150-200 million
Another Israeli tech company with offices in Tel-Aviv and California, Onavo helps you cut down on those scary data charges and claim to be able to get users up to five times more out of their data plan. Making Internet use more affordable is a long-term goal of Facebook’s, who have hired several technology companies to help them realize this goal. CEO Mark Zuckerberg intends to make sure underserved communities are provided with affordable Internet services, and Onavo’s data-saving features will go a long way to ensuring this happens. At up to $200 million, the now parent company decided it would be cheaper to buy Onavo than to independently design competing software from scratch. There are three apps: Extend, Count and Protect. The names are self-explanatory, with the first app extending data life through compression, the second counting usage as well as telling you where you use most and the last protecting users from phishing sites as well as malicious ones. All three Onavo apps are free.
2 Instagram: $1 billion
Making the news in spring 2012 with their biggest purchase ever at the time, Facebook purchased their young competitor (founded in 2010) for $1 billion. Although Instagram had tremendous popularity, it was nowhere near a billion-dollar value yet. Why did Facebook spend this phenomenal sum? As analyzed by Forbes magazine, there are several good reasons: One of the most pressing ones may have been that for photos, Instagram was just a better platform, with all sorts of filters that allowed users to play with images in ways Facebook’s platform didn't allow. This was a massive draw for young users, who Facebook was already losing.
The now parent company, then described as “getting wrinkles,” was not quite as popular anymore. Despite CEO Mark Zuckerberg’s previous hacker fame, Facebook has gotten so big, it is now considered to be The Man. By purchasing Instagram (many fans of which, by the way, felt it was a sell-out), FB was buying “cool,” as well as ensuring no competitor would get it first. Another key reason for the savvy purchase is that Facebook now have much more image data to work with, improving their means of targeting what users like, using the increased image revenue. What this could mean in dollars is that in the long run, $1 billion could end up being a deal for Facebook.
1 WhatsApp: $19 billion
The largest tech buy not only by Facebook but of all time happened earlier this week. On the 19th of February, it was announced that Facebook was buying WhatsApp, a cross-platform messaging app that allows users to chat for free between smartphones. Not as well known in America (where unlimited messaging plans are common) WhatsApp has grown phenomenally at a global level since its inception in 2009. The 55-employee company based in California was co-founded by Jan Koum, who was courted by Facebook CEO Mark Zuckerberg, and Brian Acton. Koum and Acton were engineers for Yahoo before they left to form WhatsApp. The former grew up in communist Soviet Ukraine; he knows what poverty looks like and has experienced some of the worst restrictions that governments can inflict on their people. He wanted to help people in other parts of the world have a free means of open communication with relatives far away. WhatsApp made sure of two things: they avoided using ads for revenue - thereby retaining control - and managed to keep government trackers (American this time) away. Zuckerberg has indicated he has no wish to force big changes on the smaller company, who will still operate independently, while having access to Facebook’s infrastructure.