Even with Facebook stock prices decreasing every day with their recent IPO still in the rear view mirror, it seems that this hasn’t prevented them from shopping around. Facebook purchased not too long ago the mobile app company, Instagram, for an absurd amount of money ($1 Billion USD). People questioned this move since just a year ago Instagram was valued for $100 million USD. Many speculated that it was a bold move to say that no one can touch Facebook who can afford to frivolously spend $1 Billion USD, others have said it was because Facebook is weak when it comes to mobile phones. Officially, Zuckerberg stated in his blog post:
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. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.
The Instagram purchase aside, Facebook was recently rumored to purchase Face.com for $100 million as well as OPERA SOFTWARE ASA which will cost around $1-1.2 billion.
What are Face.com and Opera?
Face.com is a technology company operating the leading face recognition platform. They create highly accurate face recognition software. Opera is a Norwegian based mobile browser maker which makes the most of browsing on mobiles such as tablets and cellphones.
So… Why does Facebook want it?
The biggest issue that Facebook is facing right now is that the bulk of their users are using the mobile Facebook application, yet they have absolutely zero advertisements. The mobile industry is not their forté and these purchases will hopefully solidify their place in the mobile industry.
Facebook is currently in a very interesting situation as they have over 900 million active users and half of them connect on their mobile device. In addition, it is believed that the future of their users will come from countries such as India and Africa where viewing Facebook is on a simple mobile browser. As such, their current offering where the Facebook application is only available in Apple and Google stores evidently has its limitations. With Opera’s knowledge of mobile browsers, Facebook has an advantage to capture the emerging markets and retain a foothold.
But… Can Facebook acquire Opera?
Opera has informally been on the market for a while and has turned down offers from companies such as Google and Yahoo. Facebook’s biggest obstacle in purchasing Opera is the founder and top shareholder, Jon S. Von Tetzchner, as he wishes to continue the independent growth of their company.
It seems like Facebook is in a rush to purchase as many companies as possible at an ridiculous value to stay alive. However, will that strategy work? They seem to be following in Microsoft’s footsteps when they purchased Skype for $8.5 Billion USD. Only time will tell.