Merger and Acquisitions

Topics: Facebook, Google, Instant messaging Pages: 13 (3805 words) Published: December 2, 2012

M & S (short phrase mergers and Acquisitions) is to enter the sale and merger of businesses in the market. These two concepts often go together because one or more of the same, pretty much to cases where one cannot distinguish the difference and do not have enough information to comment (Anon 1, N.D)

M & A are done in some cases are as follows:

Basic principles: to proceed with the acquisition and merger of a company is to create new value for the shareholders that maintain the old state is not achieved.

In terms of value: the company after conducting M & A must be greater than the sum of the present value of both as a stand-alone company.

Competitiveness: Strong companies buy other companies is often to create a new company with high competitiveness, achieve cost-effective, larger market share, operational efficiency more.

Consensus: The shareholders have agreed this with the majority of the votes cast. Acquisition and merger of Microsoft and Yahoo! Have failed due to not enough consensuses necessary (Anon 2, N.D)

Since its establishment until now Facebook has acquired a wealth of different companies but deal the most prominent of which is the acquisition of Instagram as well as ConnectU. Actually, ConnectU did not exist in a court settlement and acquisition of intellectual property rights previously held by Friendster opponents. Most companies headquartered in the United States and the surrounding San Francisco Bay area were acquired by Facebook (Anon 3, N.D)

CEO of Facebook Mark Zuckerberg has stated that: “ We have not once bought a company for the company. We buy companies to get excellent people. To have a real culture of the business it is important to ensure that we are recruiting, the best people. One way to do this is to focus on the acquisition of great companies with great founders” (Anon 4, N.D)

Therefore, We can see the success in the acquisition other companies of Facebook, and hit is Instagram on acquisitions of 4/9/2012 and may be regarded as the first exception towards this model (Anon 5, N.D)

Firstly, We can discuss about the strategic reason why Facebook was acquired Instagram.

Instagram is a free photo sharing software that allows users to take photos on your phone, add filters to the image, and then share them on various social networks, including Instagram. These photographs will be square with the 4:3 ratio is often used in mobile devices.

Instagram was originally designed exclusively for iPad, iPhone and iPod Touch. Then, Instagram version for models running Android OS 2.2 or higher in April 2012. Instagram for Android is now released on Google Play.

There are some reasons made Facebook was acquires Instagram:

- Because it could.

Obviously Facebook has a ton of cash on hand so they will easily be able to acquire Instagram even though it is an unusual for a company to drop a cool $1 billion heading into its IPO.

- Because it didn’t want a competitor to snap it up first.

Actually, many analysts believe that the reason Facebook aggressive spending such a large amount is annexed to a potential competitor or at least prevent it from falling into the hands of competitors such as Twitter or Google.

Instagram is a very valuable asset. Not only Facebook, but Twitter also want to own the company," the founder of Internet Social Fund, Lou Kerner, said. Mr. Kerner said that even search giant Google also expressed interest in Instagram, so here is a valuable asset to anyone who wants to compete with Facebook (Kashmir H, 2012)

- A crisis of middle-aged people are using facebook has made ​​them decide to buy Instagram. The universal consensus is that Facebook is no longer attractive, it’s appears wrinkles. By acquisition of Instagram, the image was improved, and they bought itself 30 million hipsters, and all are great (Kashmir H, 2012).

- Actually, the Facebook users want to look at pictures of other people and Facebook want...
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