Will Facebook acquire Twitter?

This report can be used as a basis for an extended essay for the international baccalaureate.  

Abstract

This report involves and analysis of the question “With Facebook’s recent acquisition of Instagram and Whats App to what extent may a horizontal integration with Twitter be an appropriate growth strategy?”

Facebook is globally one of the most well-known social networks being the market leader in social networking for several years. However like many other industry leaders, Facebook is facing a number of pressures for change. In order to avoid losing market share to competitors such as WeChat, QQ and Snapchat, Facebook must adopt relevant future growth strategies. Facebook has a history of external acquisition especially horizontal integration.

Due largely to Twitters falling stock prices and market position, the media has focussed on the possibility of Facebook acquiring Twitter.

This report focuses on a range of secondary sources to help analyse this question, comprising empirical research of similar acquisitions previously, a review of academic journals which look at this type of growth strategy and the analysis of both Facebooks and Twitters internal and external environments. Furthermore, access to shareholder report provided important financial data. Specific business techniques included; Porters’ Five Forces, a STEEPLE and Strengths and weaknesses analysis and a quantitative analysis of industry trends allowing a 4 period moving average.

The body of this report, contains an analysis and evaluation of this question using both quantitative and qualitative internal and external information.

The final section comprises a conclusion based on information discussed previously; this being that management does need to at least consider a possible acquisition by Facebook. Supporting reasons for this include may be a favourable financial position and previous success of this strategy, although some possible issues are identified. However the conclusion also states that further management action is required for a more detailed conclusion along with a recognition of certain limitation in this analysis.

 

Part one

“To be successful and remain in business, both profitability and growth are important and necessary for a company to survive and remain attractive to investors and analysts[1].”

This quote is especially relevant as businesses turn to globalisation as shareholders/investors look for an increase in returns even with increasing worldwide economic volatility[2]. Growth essentially relates to expanding a business’s operations through elements of internal and/or external growth[3]. Selecting the most appropriate growth strategy is pivotal, especially as the financial risk of investment increases[4].

As of February 2016, Facebook held a 43.9% share of the Social networking market[5], being the global leader.[6] Initially founded in 2004 by Mark Zuckerberg, Facebook was privately funded until 2012 when they held an IPO[7]. They currently rank 10th on Forbes’ most valuable brands[8]. Their growth is due to former acquisitions and internal growth; a combination of external and organic growth. Facebook has acquired 57 companies with the last acquisition on October 5th, 2015[9], indicating the significance of the strategy.

According to Ansoff, their growth strategy is focussed around a combination of market penetration, market development and product development; expanding their user community, offering new products/services whilst increasing current user engagement[10].

However like many other global businesses, they face numerous external pressures such as developing global technologies, economic volatility, which could affect their returns and funding for investments, and changing customer needs; such as improvements in privacy and accessibility[11]. Technology quickly becomes redundant through advancements in mobile phone capabilities, software/hardware upgrades and storage capabilities[12]. For Facebook, the increasing expansion from global competitors is a major operating pressure.[13] WeChat has emerged from China and has seen millions of users flocking to use their platform.[14] WeChat aims to penetrate South East Asia, which also happens to the market which Facebook is expanding into.[15]

As an example of their acquisition growth strategy, in late 2012, Facebook acquired Instagram who was a major competitor that specialised in instantaneous photo-sharing[16]. It was also a ‘eat or be eaten’ decision for Mark Zuckerberg, driven by rumours of Google and Microsoft lurking around.[17] At the time, the culture of Instagram was also considered to be very similar to Facebook as their vision was “To capture and share the world’s moments”[18].

This acquisition was a form of horizontal integration, which involves acquiring other businesses or services that are at the same stage of production in similar industries, as both Instagram and Facebook are social media networks[19].

Interestingly, Zuckerberg claimed that “This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all[20]” Ironically this has not been the case as discussed later.

Looking at quantitative data alone, Instagram surpassed 400 million[21] MAU (Monthly Active User) in 2015, beating the second largest social media company, Twitter, by 31% in active user base[22]. Their growth has been supported by popularity in foreign markets and teenagers as Instagram offers a greater sense of privacy[23]. Ultimately giving Instagram a worth of $US35b in early 2016 and is estimated to earn $US3.2b in revenue for 2016.[24] Therefore, Instagram has been one of the stronger driving factors regarding Facebooks recent growth.[25] Furthermore, suggesting that Instagram’s corporate culture and employee motivation has not been heavily affected[26].

As another example of this strategy, Facebook acquired WhatsApp in 2014 in a deal valued at $US19.6b[27]. WhatsApp is globally the most popular free mobile messaging app with over a billion MAU[28]. Although being criticized for overpaying for a free service, Facebook gained significant access to a large new global user base[29]. Furthermore, it allowed Facebook to eliminate competition in the market and reduced the chance for another competitor to acquire Whatsapp[30].

According to Zuckerberg, Whatsapp and Facebook had a similar philosophy regarding customer charges, demonstrating their similar vision[31]. During the acquisition, founder Jan Koum was known to help his team navigate the acquisition to ensure WhatsApp maintained its culture and independence, as was with the case with Instagram[32].

More recently and continuing into 2016, rumours have surfaced regarding possible businesses acquiring Twitter, another leading social network[33]. In that mix is Facebook, largely due to their financial capacity and a rival. This timing is vital with Twitter’s shares plummeting significantly throughout 2015.[34]

Whether this occurs would be an important issue for a number of reasons. The huge cost of $US12b could potentially have significant consequences on Facebook’s survival and represents two of the biggest market players combining[35]. It also represents a huge issue in that if Facebook is seen to be unsuccessful in any purchase or return on investment, it could have a detrimental impact on their brand image, challenging their market strength.

Therefore my question is “With Facebook’s recent acquisition of Instagram and Whats App to what extent may a horizontal integration with Twitter be an appropriate growth strategy?” To explore this question, the focus is largely from Facebooks perspective. The following analysis considers a range of internal and external factors using relevant business analytical tools. In the context of “to what extent” the analysis looks at the possible financial implications in terms of market share and profitability together with a more cultural perspective in terms of vision, synergy, employees and management.

 

Part two

To tackle this report, I based my findings on secondary research through a combination of web based, academic sources/journals and the companies’ respective shareholders reports. Most sources came from within the last 4 years which covers Facebooks acquisition of Instagram in 2012.

Search engines such as Google and JSTOR combined with the ProQuest database, provided the focus of the research and sourced a range of both qualitative and quantitative data.

A range of business tools and techniques were used in the analysis such as a strength and weakness analysis, Porter’s 5 forces, trend analysis based on financial data, the Ansoff matrix and a STEEPLE analysis specifically for external related issues.

There are limitations within this report which do restrict a more comprehensive analysis. These limitations include unavailability of a key data base, privacy restrictions particularly relating to a lack of financial information. Where possible, largely objective sources were used, however some opinion pieces helped to give a range of views and contrast on specific situations. The challenge was to ensure that the information was valid when some sites had conflicting information.

 

Part three

To provide a more academic discussion behind this form of growth, J. Dunbar claims that acquisitions have become a common form of growth in a world fuelled by organisations fixated on growth[36]. Reasons include the intended synergy of the new structure and the increase in market share, market power and larger customer base[37]. Not only this, it is seen as a quicker method of growth especially in terms of protecting the survival of a business in a more competitive market[38]. Specifically, in the tech industry, horizontal integrations are becoming increasing popular according to Vossoughi in the Harvard business review[39]. Larger businesses may want a product/service another business has to offer, if the target business lacks funding to grow and develop what they offer, they often end up acquired[40]. This type of integration may equate to larger market share and greater market power/dominance[41].

However, acquisitions have major drawbacks such as redundancies, conflict and loss of control. Rina Steynberg claims “A culture clash between the integrating organisations is consistently cited as one of the top ten reasons for M&A failure”[42]. Potential disagreements arise from possible Job losses due to savings or repeat jobs and management teams may feel a loss of control when restructuring. Veldsman and Steynberg claim people integration drive acquisition failures.[43] The culture clash is often due to an unshared common vision and/or leadership style, meaning those co-ordinating the acquisition often overlook people integration[44]. Steynberg claimed “M&A failure results in the closing down of organisations…….. People… and the wider community… shareholders, are impacted.”[45] Communication and form also drive acquisition failures, communication between management and employees. These issues all affect the success of an acquisition[46].

Lynn Jekkals, managing director at Aon Risk Solutions claims: “(businesses) were buying companies out of bankruptcy and really bought troubled companies that weren’t making it through the tough times,”[47] Suggesting that acquiring a dying company may be high risk.

A recent Harvard Business report suggests that the acquisition failure rate sits between 70% and 90%. This extremely high figure assures this method of growth is high risk[48].

However, despite the above “criticisms”, the number of acquisitions are on the increase. Deloitte conducted a survey in which they collected data from 2,500 US executives from both companies and private equity firms in April 2014[49]. Staggeringly 84% of respondents are expecting to maintain or increase their acquisition activity over the following two years. Furthermore, 60% of the respondents forecast to acquire targets in foreign market, diversifying their customer base[50].

Any analysis of this strategy includes looking at their past record of acquisitions, but also needs to involve a study of, where possible, similarly positioned businesses. Certainly research reveals a number of both successes and failures.

In 2014, Microsoft bought Nokia for $US7.6b[51]. Nokia was once the market leader in the mobile phone market peaking at 62.5% market share, but fierce competition drove its share down to 3% (2016)[52]. According to Robert Cringley, the motive behind this acquisition was for Microsoft “to compete better with Android and iOS (as major competitors) & also to take full control of its smartphone destiny.” However, “It was a mistake to begin with,” claimed Jack Gold, principal analyst at J. Gold Associates[53]. It was deemed a failure in 2015 where Nokia had struggled to regain lost market share and is Microsoft’s biggest write off, cutting 7,800 jobs with 18,000 cut the year before[54]. Frank Gillett, an analyst with Forrester Research claimed that “It’s the last disappointment of the previous generation of Microsoft’s leadership,”[55] This shows how different the leadership styles were as well as cultures, considering both companies were founded in different countries[56].

Equally, the horizontal integration and takeover of Mojang in 2014, a company producing computer games, by Microsoft has been seen as a relative success[57]. This has opened Microsoft to a new younger demographic and when combined with their existing products, saw a significant increase in sales. Subsequently under Microsoft, Mojang is selling 10,000 games a day[58]. Matt Booty explained. “These two things can come together at their best to deliver an amazing game with forward-looking technology that required deep resources to build…..It highlights how these two companies can come together and build something that didn’t exist before.[59]” This success is due to their similar visions.

 

Part four

The analysis which follows needs to take into account the current growth, opportunities, the relative position and financial capabilities of Facebook to maintain this strategy in the social networking market. Utilising the Boston matrix[60], Facebook is in a high growth market and has a high market share.

31% of the world’s population use social media which is 2% from last year[61]. Furthermore 1.97 Billion people access their social media through mobile, again a significant increase over the 1.65 Billion in 2014/15[62].

Facebook

As previously stated, Facebook is the social network market leader with 43.9%, whereas Twitter has 5%[63]. (Figure 1)

Figure 1: Leading social media websites in the United States in February 2016, based on share of visits. 

Facebooks strong market position and growth can also be seen from looking at the constant increase in monthly active users (figure 2). In figure 2 as of ‘Q4 2015, Facebook had 1,591 million active users, a growth of 14.21%; ‘Q4 2014 being 1,393 million active users.[64]

Figure 3 highlights this trend using a four period moving average of their quarterly data base which demonstrates their consistent increase.

Year Period Users (Millions) 4 period moving average Centering Variation
Q1 2010 1 431
Q2 2010 2 482 517.75
Q3 2010 3 550 580 548.875 1.125
Q4 2010 4 608 644.25 612.125 -4.125
Q1 2011 5 680 706.75 675.5 4.5
Q2 2011 6 739 766 736.375 2.625
Q3 2011 7 800 821.25 793.625 6.375
Q4 2011 8 845 875.25 848.25 -3.25
Q1 2012 9 901 927 901.125 -0.125
Q2 2012 10 955 979.75 953.375 1.625
Q3 2012 11 1,007 1032 1005.875 1.125
Q4 2012 12 1,056 1072 1052 4
Q1 2013 13 1,110 1117.5 1094.75 15.25
Q2 2013 14 1,115 1160.5 1139 -24
Q3 2013 15 1,189 1202 1181.25 7.75
Q4 2013 16 1,228 1252.5 1227.25 0.75
Q1 2014 17 1,276 1292.75 1272.625 3.375
Q2 2014 18 1,317 1334 1313.375 3.625
Q3 2014 19 1,350 1375.25 1354.625 -4.625
Q4 2014 20 1,393 1418.5 1396.875 -3.875
Q1 2015 21 1,441 1467.25 1442.875 -1.875
Q2 2015 22 1,490 1516.75 1492 -2
Q3 2015 23 1,545 1570 1543.375 1.625
Q4 2015 24 1,591
Q1 2016 25 1,654

Figure 3: Four year moving average on Facebook’s quarterly user base[66].

Figure 4: Facebook’s revenue and net income from 2007 to 2015 (in million U.S. dollars)[67]

Facebook’s worldwide growth has also generated a large increase in revenue almost exponentially over recent years (Figure 4), (43.79% increase from 2014 to 2015). Figure 5 also highlights this through a trend analysis using moving averages. Referring to their shareholder report (Appendix 1&2) [68], their long-term debts situation has also improved markedly. (2013 – $1.5 billion / 2015 – $0). Possibly indicating the necessary financial stability to acquire Twitter.

Year Period Revenue (Millions) 4 year moving average Centering Variation
2007 1 153
2008 2 272 794
2009 3 777 1683.5 1238.75 -461.75
2010 4 1974 2887.75 2285.625 -311.625
2011 5 3711 4661.5 3774.625 -63.625
2012 6 5089 7284.5 5973 -884
2013 7 7872 10681.25 8982.875 -1110.875
 2014 8 12466
2015 9 17298

Figure 5: Facebook’s revenue four year moving average based on Figure 3

Other sources also emphasis the power of Facebook[69] . Around 62% of Americas get their news off social media sites, were Facebook holds responsibility for 44% of that[70].

 

 

Twitter

Twitter has had very stagnant growth over the last few years with very minimal user growth, suggesting the company has reached saturation.

Twitter’s revenue surprisingly increased 62% between Q2’ 2014 to Q2’ 2015, annual revenue for 2015 being $US2.2b. However investors were not confident after Twitters shares plummeted over 2015[75]. In 2015, the stock price traded at $52.87 at its April peak fell to $22.47 dollars in August. Furthermore, in 2016, fell to a staggering $14.01 in May[76].

 

Part five

An effective analysis needs to focus heavily on Facebook’s previous history with their acquisitions strategy with a range of current and possible internal and external factors. This needs to also draw upon aspects of Twitters operating environment.

The previous chapter indicates Facebook’s relative growth hence why Facebook is regarded by many analysts to be one of the likely companies to acquire Twitter.

Current strength and weaknesses

Strengths

As stated, the acquisition cost of Twitter will be approximately $US12b[78]. In 2015 Facebooks financial reports (Appendix 1&2) revealed $US18b revenue, approx. $US4b net profit, $US22b of current assets and only $US5b in total liabilities. Facebook has $US44b in shareholders equity and no long term debt[79]. These reports have shown financial stability in recent years and may indicate a financial capacity to acquire[80]. (Table 1)

Another strength of Facebook is undoubtedly their success in using this strategy in the past with Whatsapp and Instagram being referred to previously[81]. (Table 1)

As of February 2016, Facebook already has a market share of 45.5% including Instagram[82], Indicating significant market leadership. Acquiring Twitter could create a staggering 50.5% of the US market share. (Table 1)

Additionally within the industry, Facebook is seen to have a very strong and innovative culture, enabling them to take on more products. Harry McCracken described Facebooks culture as, “fabulously successful working environment that Zuckerberg devised in the early years”[83]. (Table 1)

Weaknesses

There is some suggestion that there may be an element of saturation in this market (Eldon, “Facebook Started Saturating the US Market In 2011”[84]), especially with new competitors. Figure 2 previously does suggest a slowing in rate of growth. (Table 1). Integrating Twitter’s algorithm into Facebook could possibly be a solution. However, it may be more viable to acquire a start-up that has a much larger potential compared to company who has not seen growth nor large amounts of profiting years (Twitter).[85]

Furthermore around 80% of Facebooks revenues come from advertisements on its social network[86]. However, the revenue is dependent on the growth of users which eventually, may hit saturation in certain markets[87]. Therefore Facebook may rely too heavily on one revenue stream which is subject to change with new competitors emerging in the market. (Table 1)

 Table 1: Strengths and Weaknesses of Facebook

Strengths

1.     Financially, large Increase in revenue streams and market share[88].

2.     Strong record of successful acquisitions[89].

3.     Recognised to have a digital face to face connection with customers[90].

4.     Strong and innovative culture[91].

 

Weaknesses

1.     Some markets at reaching the saturation point for Facebook.[92]

2.     May heavily rely on one revenue stream[93].

 

 

Porters’ Five Forces analysis is another useful tool to also help analyse the possible acquisition by assessing its competitive position.

Porters Five Forces

Threat of new entrants

The social networking is open to new competitors as the market is deregulated (e.g. see figure 1). Hence Facebook continually faces new entrance[95].

Threat of Substitution

With the increase in the range of competitor’s service in the market, many consumers have started to use multiple social networks. This is a major threat to Facebook especially with international social networks such as WeChat and QQ whom grow at faster rates[96].

Supplier Power

In this element, Facebook holds a strong position as they own servers[97].

Buying Power

Consumers having more choice through developments in technology, advertising and changing needs leads to high customer power.

Rivalry among existing competitors

Even though Facebook has acquired some of its competitors such as Whatsapp and watched competition fail such as Myspace, there is still significant rivalry particular in terms of Google +, Snapchat and WeChat[98].

General conclusion

So even though Facebook is the market leader, using this technique does suggest that increasingly they are in a more competitive market that does require innovative strategies that will retain or grow their user base as well as revenue streams[99].

 

A steeple analysis also provides a number of external considerations as to whether this acquisition should take place.

 

STEEPLE

Table 2: Steeple analysis

  Opportunities Threats
Political ·       The further opening up of US’ connections with other countries can provide further market development (Ansoff). ·       Uncertainty of the upcoming US presidential election may impact on investor confidence[100].

·       Regulations in China can impact on the global success especially with Chinas fast growing market[101].

Economic ·       The forecasted growth of the US Economy may provide further advertising revenue to help fund this acquisition of Twitter, may provide investor confidence. (Refer to Figure 11) ·       The threat is that if the market remains volatile with less growth than predicted than the acquisition may not be as successful.
Social ·       Customers who use both or just one can integrate together which helps their mission statement of bringing everyone together. ·       Facebook is seen to even gain more powerful which could be a public concern.

·       Acquisition doesn’t provide the consumer with significantly different services.

Technological ·       Use of global technological advancements to help their applications and synergy of the systems. ·       Rival companies may develop new innovative services this acquisition doesn’t really provide.
Legal ·       Facebook able to patent twitters systems and devices, therefore protecting intellectual property and restricting other business usage. ·       US antitrust law prohibits any acquisition or merger that would have the tendency to lessen competition or create a monopoly.
Environmental

And Ethical

·       With an increase in public and media focus on businesses being socially responsible, Facebook can benefit Twitters recognised stance ·       Possible community backlash through possible redundancies.

·       Media’s portrayal of this acquisition may affect brand image.

 

Other considerations

A strength already discussed is Facebooks seemingly strong financial position, (high revenue low debt), which could cover the $12b cost, especially given it would only be a two thirds the price of the Whatsapp acquisition. Furthermore, they do have past success in this strategy, however with concerns about the volatility of the economy, perhaps there is greater risk in the timing of this strategy. Also, as identified previously, the potential acquisition may have consequences on their brand image, from the perspective of an increase in market power and negative ethical issues[103].

Even if the financial side was viable, the STEEPLE analysis previously did identify US antitrust law prohibiting any acquisition or merger that would have the tendency to lessen competition or create a monopoly[104]. Also a pre-acquisition notification must be filed with the US Department of Justice and the FTC (Federal Trade Commission)[105]. Considering the size of this acquisition, it could take time before it passes through, thus tying possible funds.

Certainly a big consideration would be whether the leadership styles of both Facebook and Twitter and culture are compatible. From evidence, they seem to be a similar, however there needs to be more research from management to see if the cultures are compatible[106]. From past examples, Whatsapp and Facebook had similar visions and integrated with synergy.

Zuckerberg (CEO of Facebook) has shown an appetite to acquire other businesses despite at times saying things on the contrary after the acquisition of Instagram. Showing Zuckerberg’s immaculate leadership and management skills to create these successes.

A big consideration is the possible impact directly on the staff of Twitter and also on the possible job security of existing loyal staff at Facebook. Whatsapp had only 55 employees when acquired, leading to a seamless transition. As of December 2015, Twitter had 3,900 staff located around the world[107]. Integrating 3,900 employees situated around the world takes time. This highlights how there will be issues regarding staff that work as management in software, technicians, marketing and accountants as these areas appear as jobs with similar functions in both organisations. If Twitter was left as subsidiary, at least in the short term, then job losses may not be limited.

As previously discussed, the anticipated future growth of the US economy is estimated to be around 2-3%. Kimberley Amadeo, an US economy expert, claims that this is ideal growth rate that is sustainable in the future, again making this a good time for the acquisition[108]. However, if this growth did not occur, any slowdown may reduce the advertising revenue streams which Facebook heavily relies on (Table 1), ultimately negatively impacting their position on acquiring twitter. Furthermore if the market is reaching saturation as discussed previously, the risk involved could also increase. Given that Twitter uses essentially the same revenue streams, the acquisition perhaps would not help Facebooks revenue sources.

A further argument is that Twitter possibly provides what Facebook needs. This is the area of having a strong mobile base whereby consumers have real up to date information of world events. This is supported by a global survey conducted by the organisation “we are social”.  This may allow Facebook to more actively confront their rivals which do this effectively such as Snapchat and WeChat[109]. There is a definite threat towards Facebook as international competition grows at an increasing rate, such as WeChat. Even though Facebook is still clearly the market leader, it cannot afford to wait for this position to be lost or challenged.

Interestingly, Kara Swisher at Re/Code, paints Facebook as a Disney-like media giant[113], and actually feels that Facebook may be better off developing their own twitter like[114] service, which may come at a lower cost. However, Charlotte lee highlights Facebooks failures[115] in attempting to build their own mirror like services, suggesting it may be better to acquire than to waste time and resources to “re-engineer” an already performing product[116]. However, this claim requires more research.

Furthermore the timing might be right for the acquisition especially after the rumours about News Corp acquiring twitter which sent Twitters share prices soaring up until the rumours were disproven, sending the prices back down[117]. If Facebook did acquire Twitter, this could impact their share prices positively. Furthermore Facebook having access to Twitters user data gives Facebook the ability to directly target their advertisements.

Another possible strength of any acquisition is the similarity of target markets according to figure 16. [118] This shows that for both business their primary target market is of the ages of 30-49, possibly their general marketing focus may be similar already.

 

Part six

In conclusion, this analysis suggests that it would in the management of Facebooks best interests to at least consider the possibility of an acquisition of Twitter as a growth strategy. This is accentuated by the evidence that has been collected suggesting that the global social networking market has become increasingly competitive and if Facebook desires to stay as market leader, it is required for them to grow.

All sources suggest any business must continually change and adapt to the consumer’s needs; without adaptation, they will not survive.  It may not be Twitter, but Facebook may be well positioned to acquire another business.

Previous analysis has identified many possible favourable conditions in favour of an acquisition at this point in time, this includes a steady increase in revenue, stable financial position[120], excellent innovative culture and strong leadership and management teams. Facebook has a proven history with acquisitions, certainly have shown they can plan and adopt successful strategies. However, there are some issues for management to consider further, this includes the consideration of the possible impact of the upcoming US presidential election on the US economic stability, investor confidence, US antitrust laws and community backlash.

A more detailed analysis is required due to imitation such as confidentiality issues regarding financial information relating to both Twitter and Facebook, potential subjectivity of some secondary sources, time and word constraints, and lack of access to primary sources. Also management must consider this question on a more global perspective as this essay focuses primarily from a US perspective. Furthermore there is a need for much more detailed research on the cultural compatibility on both Twitter and Facebook. As such, no definitive statement can be reached in this report about the suitability of any acquisition until more detailed research is undertaken.

 

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[2] Ibid

[3] Jeffalytics. (2014). The Importance of Business Growth: If you’re Not Growing, You’re Dying. [online] Available at: https://www.jeffalytics.com/growing-business-advice/ [Accessed 30 May 2016].

[4] Liabotis, B. (2016). Three Strategies for Achieving and Sustaining Growth •. [online] Available at: http://iveybusinessjournal.com/publication/three-strategies-for-achieving-and-sustaining-growth/ [Accessed 30 May 2016].

[5] Leading social networks worldwide as of January 2016, r. (2016). Leading global social networks 2016 | Statistic. [online] Statista. Available at: http://www.statista.com/statistics/272014/global-social-networks-ranked-by-number-of-users/ [Accessed 11 Mar. 2016].

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[9] As of 18/02/16  https://www.crunchbase.com/organization/facebook#/entity

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[22] Manalo J (2014). Instagram Surpasses Twitter in Monthly Active Users for the First Time. [online] Available at: https://skift.com/2014/12/10/instagram-surpasses-twitter-in-monthly-active-users-for-the-first-time/ [Accessed 6 Jun. 2016].

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[27] Deutsch, A. (2015). WhatsApp: The Best Facebook Purchase Ever? | Investopedia. [online] Investopedia. Available at: http://www.investopedia.com/articles/investing/032515/whatsapp-best-facebook-purchase-ever.asp [Accessed 29 May 2016].

[28] WhatsApp: number of monthly active users 2013-2016 | Statistic. (2016). [online] Statista. Available at: http://www.statista.com/statistics/260819/number-of-monthly-active-whatsapp-users/ [Accessed 30 Apr. 2016].

[29] Lieberman, D. (2014). Did Facebook Overpay For WhatsApp?. [online] Deadline. Available at: http://deadline.com/2014/02/did-facebook-overpay-for-whatsapp-686378/ [Accessed 30 May 2016].

[30] Newman, J. (2014). Facebook’s WhatsApp Acquisition Explained. [online] TIME.com. Available at: http://time.com/8806/facebooks-whatsapp-acquisition-explained/ [Accessed 30 May 2016].

[31] Telegraph.co.uk. (2014). Facebook buys WhatsApp: Mark Zuckerberg explains why. [online] Available at: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digital-media/10650340/Facebook-buys-WhatsApp-Mark-Zuckerberg-explains-why.html [Accessed 30 May 2016].

[32] Spiegelman, P. (2014). How to Keep Company Culture Alive After an Acquisition. [online] Entrepreneur. Available at: http://www.entrepreneur.com/article/238168 [Accessed 28 Mar. 2016].

[33] Ingram, M. (2016). Buying Twitter: Here Are Some Likely—and Not So Likely—Candidates. [online] Fortune. Available at: http://fortune.com/2016/01/22/buying-twitter/ [Accessed 29 May 2016].

[34] Alexander, T. (2015). Twitter is in trouble and has uncertain future – Koffee-O-Matic. [online] Koffee-O-Matic. Available at: http://koffee-o-matic.com/business/twitter-is-in-trouble-and-has-uncertain-future/ [Accessed 12 Mar. 2016].

[35] Ingram, M. (2016). Buying Twitter: Here Are Some Likely—and Not So Likely—Candidates. [online] Fortune. Available at: http://fortune.com/2016/01/22/buying-twitter/ [Accessed 29 May 2016].

[36] Dunbar, J.K. 2013, The role of organizational leadership capability in mergers & acquisitions, University of Pennsylvania.

[37] ibid

[38] Investopedia. (2015). What strategies do companies employ to increase market share? | Investopedia. [online] Available at: http://www.investopedia.com/ask/answers/031815/what-strategies-do-companies-employ-increase-market-share.asp [Accessed 30 May 2016].

[39] Today’s Best Companies are Horizontally Integrated. (2012). [online] Harvard Business Review. Available at: https://hbr.org/2012/12/todays-best-companies-are-hori [Accessed 30 Apr. 2016].

[40] Curtis, G. (2006). Trademarks Of A Takeover Target | Investopedia. [online] Investopedia. Available at: http://www.investopedia.com/articles/stocks/07/takeover_target.asp [Accessed 29 May 2016].

[41] Renaud, R. (2006). Why do companies merge with or acquire other companies? | Investopedia. [online] Investopedia. Available at: http://www.investopedia.com/ask/answers/06/mareasons.asp [Accessed 29 May 2016].

[42] Steynberg, R.P. & Veldsman, T.H. 2011, “A comprehensive, holistic people integration process for mergers and acquisitions”, SA Journal of Human Resource Management, vol. 9, no. 1, pp. 1-16.

[43] ibid

[44] ibid

[45] ibid

[46] ibid

[47] Weick, R (2014). Business mergers and acquisitions for strategic growth are on rise. [online] Available at: http://www.grbj.com/articles/print/80107-business-mergers-and-acquisitions-for-strategic-growth-are-on-rise [Accessed 29 May 2016].

[48] Today’s Best Companies are Horizontally Integrated. (2012). [online] Harvard Business Review. Available at: https://hbr.org/2012/12/todays-best-companies-are-hori [Accessed 30 Apr. 2016].

[49] M&A Trends Report 2014; a Comprehensive Look at the M&A Market. 1st ed. Deloitte Development LLC, 2014. Print.

[50] ibid

[51] Fiegerman, S. (2015). Microsoft subtly admits the Nokia deal was a failure, 7,800 employees lose their jobs. [online] Mashable. Available at: http://mashable.com/2015/07/08/microsoft-layoffs-nokia/#7plAePwX5Sq5 [Accessed 30 Apr. 2016].

[52] N. Ramachandran. (2016). A STUDY ON NOKIA’S FAILURE IN THE GLOBAL MARKET AND CONSUMER PREFRENCE LEVEL TOWARDS NOKIA INTRODUCTION OF THE STUDY. [online] Available at: http://www.academia.edu/14433835/A_STUDY_ON_NOKIAS_FAILURE_IN_THE_GLOBAL_MARKET_AND_CONSUMER_PREFRENCE_LEVEL_TOWARDS_NOKIA_INTRODUCTION_OF_THE_STUDY [Accessed 30 May 2016].

[53] Keizer, G. (2016). Microsoft writes off $7.6B, admits failure of Nokia acquisition. [online] Computerworld. Available at: http://www.computerworld.com/article/2945371/smartphones/microsoft-writes-off-76b-admits-failure-of-nokia-acquisition.html [Accessed 6 Jun. 2016].

[54] Fiegerman, S. (2015). Microsoft subtly admits the Nokia deal was a failure, 7,800 employees lose their jobs. [online] Mashable. Available at: http://mashable.com/2015/07/08/microsoft-layoffs-nokia/#7plAePwX5Sq5 [Accessed 30 Apr. 2016].

[55] Fiegerman, S. (2015). Microsoft subtly admits the Nokia deal was a failure, 7,800 employees lose their jobs. [online] Mashable. Available at: http://mashable.com/2015/07/08/microsoft-layoffs-nokia/#7plAePwX5Sq5 [Accessed 30 Apr. 2016].

[56] Arthur, C. (2014). Elop was ‘wrong man to lead Nokia’ says new book on phone company’s downfall. [Online] the Guardian. Available at: https://www.theguardian.com/technology/2014/oct/08/nokia-stephen-elop-operation-new-book [Accessed 29 May 2016].

[57] Owen. (2016). Yes, we’re being bought by Microsoft. [online] Available at: https://mojang.com/2014/09/yes-were-being-bought-by-microsoft/ [Accessed 30 May 2016].

[58] Staff, D. (2016). Minecraft selling a whopping 10,000 copies a day | Dispatch Tribunal. [online] Dispatchtribunal.com. Available at: http://www.dispatchtribunal.com/minecraft-selling-a-whopping-10000-copies-a-day/21145/ [Accessed 30 Apr. 2016].

[59] Gaudiosi, J. (2016). More Minecraft Coming Your Way. [online] Fortune. Available at: http://fortune.com/2016/03/01/how-microsoft-just-changed-minecraft/ [Accessed 29 May 2016].

[60] Owen. (2016). Yes, we’re being bought by Microsoft. [online] Available at: https://mojang.com/2014/09/yes-were-being-bought-by-microsoft/ [Accessed 30 May 2016].

[61] Digital in 2016 – We Are Social UK. (2016). [online] We Are Social UK. Available at: http://wearesocial.com/uk/special-reports/digital-in-2016 [Accessed 18 Apr. 2016].

[62] Ibid

[63] Figure one

[64] Digital in 2016 – We Are Social UK. (2016). [online] We Are Social UK. Available at: http://wearesocial.com/uk/special-reports/digital-in-2016 [Accessed 18 Apr. 2016].

[65] Graph sourced from Statista. (2016). Number of Facebook users worldwide 2008-2016 | Statistic. [online] Available at: http://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/[Accessed 18 Apr. 2016].

 

 

[66] Graph sourced from Statista. (2016). Number of Facebook users worldwide 2008-2016 | Statistic. [online] Available at: http://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/%5BAccessed 18 Apr. 2016].

[67] Graph sourced from Statista. (2016). Facebook: annual revenue and net income 2015 | Statistic. [online] Available at: http://www.statista.com/statistics/277229/facebooks-annual-revenue-and-net-income. [Accessed 24 March 2016]

[68] Facebook, Facebook Reports Fourth Quarter and Full Year 2015 Results. 2016. Print.

[69] Gottfried, J. and Shearer, E. (2016). News Use across Social Media Platforms 2016. [online] Pew Research Centre’s Journalism Project. Available at: http://www.journalism.org/2016/05/26/news-use-across-social-media-platforms-2016/ [Accessed 28 May 2016].

[70] ibid

[71] ibid

[72] Graphed sourced from Statista. (2016). Twitter: number of monthly active users 2016 | Statistic. [online] Available at: http://www.statista.com/statistics/282087/number-of-monthly-active-twitter-users/ [Accessed 26 May 2016]

[73] MAU is an abbreviation for Monthly Active Users

[74] Graph sourced from Roettgers, J. (2015). Can Jack Dorsey’s Twitter Revolution Save the Company? [online] Variety. Available at: http://variety.com/2015/digital/news/jack-dorsey-twitter-ceo-new-1201621233/ [Accessed 29 May 2016].

[75] Lynley, M. (2016). Twitter’s dysfunctional Wall Street relationship. [online] TechCrunch. Available at: http://techcrunch.com/2016/05/01/twitters-dysfunctional-wall-street-relationship/ [Accessed 30 May 2016].

[76] Saintvilus, R. (2016). Twitter Stock Falls after Two Top Executives Leave (TWTR) | Investopedia. [online] Investopedia. Available at: http://www.investopedia.com/articles/insights/052716/twitter-stock-falls-after-two-top-executives-leave-twtr.asp [Accessed 30 May 2016].

[77] Data sourced from Google.com. (2016). Twitter Inc.: NYSE:TWTR quotes & news – Google Finance. [online] Available at: https://www.google.com/finance?q=NYSE:TWTR [Accessed 04 May 2016].

[78] Ingram, M. (2016). Buying Twitter: Here Are Some Likely—and Not So Likely—Candidates. [online] Fortune. Available at: http://fortune.com/2016/01/22/buying-twitter/ [Accessed 30 May 2016].

[79] Facebook,. Facebook Reports Fourth Quarter And Full Year 2015 Results. 2016.

[80] Rosenfeld E. (2016). Facebook jumps 14% on massive earnings beat. [online] Available at: http://www.cnbc.com/2016/01/27/facebook-q4-earnings.html [Accessed 31 May 2016].

[81] orbes.com. (2016). Forbes Welcome. [online] Available at: http://www.forbes.com/sites/greatspeculations/2015/11/12/the-three-key-drivers-to-facebooks-growth/#4a49bb932c2b [Accessed 30 May 2016].

[82] Leading social media websites in the United States in February 2016, b. (2016). U.S. top social media sites visit share 2016 | Statistic. [online] Statista. Available at: http://www.statista.com/statistics/265773/market-share-of-the-most-popular-social-media-websites-in-the-us. [Accessed 30 May 2016].

[83] McCraken, M. (2015). How Facebook Keeps Scaling Its Culture. [online] Available at: http://www.fastcompany.com/3053776/behind-the-brand/how-facebook-keeps-scaling-its-culture [Accessed 22 May 2016].

[84] Eldon, E. (2016). Facebook Started Saturating The US Market In 2011. [online] TechCrunch. Available at: http://techcrunch.com/2011/12/29/2011facebookmarketsaturationus/ [Accessed 9 May 2016].

[85] Page, V. (2015). Monthly Active User (MAU) Definition | Investopedia. [online] Investopedia. Available at: http://www.investopedia.com/terms/m/monthly-active-user-mau.asp [Accessed 9 May 2016].

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[105] Baker & McKenzie. 2007, “A Legal Guide to Acquisitions and Doing Business in the United States”

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[111] Graph 1 sourced from Digital in 2014 – We Are Social UK. (2014). [online] We Are Social UK. Available at: http://wearesocial.com/uk/special-reports/digital-in-2014 [Accessed 18 Apr. 2016].

 

[112] Graph sourced from Digital in 2016 – We Are Social UK. (2016). [online] We Are Social UK. Available at: http://wearesocial.com/uk/special-reports/digital-in-2016 [Accessed 18 Apr. 2016].

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[118] ibid

[119] Sourced from Sourced from Gottfried, J. and Shearer, E. (2016). News Use across Social Media Platforms 2016. [online] Pew Research Centre’s Journalism Project. Available at: http://www.journalism.org/2016/05/26/news-use-across-social-media-platforms-2016/ [Accessed 28 May 2016].

[120] Seetharaman, D. (2016). Facebook Revenue Soars on Ad Growth . [online] WSJ. Available at: http://www.wsj.com/articles/facebook-revenue-soars-on-ad-growth-1461787856 [Accessed 28 May 2016].

[121] Facebook,. Facebook Reports Fourth Quarter And Full Year 2015 Results. 2016.

[122] Facebook,. Facebook Reports Fourth Quarter And Full Year 2015 Results. 2016.

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