In an interview on Bloomberg Television, Chamath Palihapitiya, former Facebook Inc (NASDAQ:FB) Vice President of Growth for Mobile and International, discussed acquisition strategies.
Palihapitiya talked about the take- over strategies for Facebook Inc (NASDAQ:FB) and tech giant Google Inc (NASDAQ:GOOG) on Bloomberg West. He commented on Facebook’s $19 million acquisition of the popular text messaging application, Whatsapp, and the acquisition of Oculus and said that these were some good moves by the social networking media. He had been involved with the operations of the company during some of its acquisitions and believes that Whatsapp has been the most economical and smartest acquisition.
He said that he had created a growth team at social capital in Facebook Inc (NASDAQ:FB), which the social media uses within companies that it invests in. It helps them not only growing, but also assists them in understanding the market trend of what is gaining popularity. He said, “Whatsapp will turn out to be the cheapest and smartest acquisition done by any internet company.” It will be worth much more than the initial amount that was paid to acquire it as compared to the $150 billion Facebook, along with its many acquisitions by 2016, he said.
As far as it concerns acquisitions and innovations at Facebook Inc (NASDAQ:FB), Palihapitiya does not think that it will matter what the company involves itself more into. He pointed out, citing John Chambers’ words, “If you, as a stalwart company, aren’t figuring out every day how to get into the next wave, you’re going to die.” It is important for a company to keep innovating even after five years to continue the inflow of cash. Companies like Microsoft Corporation (NASDAQ:MSFT), Cisco Systems, Inc. (NASDAQ:CSCO) and Hewlett-Packard Company (NYSE:HPQ), he said, have made this very mistake and have ended up not knowing their next move. As a result, he said, these companies’ “lunch gets eaten up.”
The full video is available below: