Facebook May Break Up with Whatsapp and Instagram
A breakup of Facebook Inc would be a blow to Mark Zuckerberg as he made heavy investments on Instagram and Whatsapp after overtaking them
The Federal Trade Commission (FTC) of the United States (US) has filed an antitrust lawsuit against Facebook after accusing it of monopoly to suppress competitors. The commission along with other US states has also sued Facebook on its acquisition of Instagram in 2012 and Whatsapp in 2014 for $715 million and $22 billion respectively.
The commission wants Facebook Inc to divest from the other two businesses which potentially will spoil the earnings of the business magnate Facebook Chief executive Officer (CEO) Mark Zuckerberg.
Most of the wealth generated for the enterprise is generated from Instagram and Whatsapp.
As the decision came out, the company’s shares dropped by 4% on December 9.
Mark Zuckerberg wants to make Instagram and Whatsapp as mainstays for his company.
Facebook acquired these promising rival platforms precisely because it expected the main social network to one day fade, and it wanted to be the company deciding what apps people would turn to next, Bloomberg reported.
The social networking website is running out of space to place advertisements on users’ feed and placement of excessive ads may lead to irking them.
A breakup of Facebook Inc would be a blow to Mark Zuckerberg as he made heavy investments on Whatsapp and Instagram after overtaking them which evolve them into what they are today.
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“Our acquisitions of Instagram and WhatsApp have dramatically improved those services and helped them reach many more people,” Zuckerberg wrote in a post to employees as reported by Bloomberg.
Instagram generated over $20 billion in revenue in 2019. Researchers predict that the photo-sharing-app will generate sales of around $28 billion.
Whatsapp currently doesn’t generate revenue for the company but planned advancement in customer services tools which will likely link it with the other two platforms and boost the company’s growth.
The footprint of Facebook has grown bigger with the inclusion of Whatsapp and Instagram as both applications have more users in many countries than the social networking platform.
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