Expanding the social network
It was at this point that the company made two of its most significant acquisitions: Instagram and WhatsApp.
Shortly before its IPO in 2012, Facebook announced it had made a deal to buy the popular photo-sharing app Instagram for $1 billion.
At the time of the deal, Instagram had only been around for two years but had already amassed more than 30 million users. Facebook realised that Instagram was where younger consumers were heading and snapped up the company before others had the chance.
This acquisition has been cited as one of the main reasons Facebook grew from a $58 billion company in 2012 to a $500 billion one in 2017.
In February 2014, Facebook announced it would be acquiring WhatsApp Messenger for $19 billion.
Though WhatsApp hadn’t been widely used in America, it was the most popular messaging app in more than half the world – and is actually a larger success than Facebook in emerging markets, such as Brazil and Mexico.
Many analysts felt that Facebook paid over the odds for WhatsApp. This change in tactic was a result of photo-messaging app Snapchat rejecting Facebook’s bid of $3 billion in 2013. Snapchat went on to be valued at more than six times that price in its 2017 IPO.
Becoming a tech giant
In July 2017, Facebook hit a market capitalisation of half a trillion dollars after their shares surged 5.7% to $175. The rise in shares was caused by two announcements made after markets closed the previous evening – that Facebook’s quarterly profits were up 71%, and that they had reached 2 billion users (27% of the world’s population).