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What is Facebook’s secret when it buys new companies?

These days, Mark Zuckerberg tried to explain why Facebook is continuing to buy new companies and how it does it. As we know, in the last couple of months, Facebook bought Oculus for 2 billion dollars. That was one of the most interesting deals on the tech market.

On the other side, Google was also interested in buying the virtual reality startup. But, it seems that Facebook was quicker.

Another similar situation was when Facebook decided to buy WhatsApp in 2014. The price? Well, 19 billion dollars.

Another interesting thing is that rumors are claiming that there was another rival tech giant who planned a similar deal. It seems Google was the rival. So, within a few weeks, Facebook managed to successfully close two deals on Oculus and WhatsApp. The great thing? Facebook has beaten Google twice.

The main secret of buying new companies is moving fast.

So, these days, Mark Zuckerberg offered rare insights into how he approaches acquiring other companies.

The first thing that Facebook has to make is to build relationships. Mark Zuckerberg has declared that he usually approaches big acquisitions by first establishing friendships with the founders of the companies he wants to buy.

And I've been building relationships, at least in Instagram and the WhatsApp cases, for years with the founders and the people that are involved in these companies," Mark declared, "which made it so that when it became time or when we thought it was the right time to move, we felt like we had a good amount of context and had good relationships so that we could move quickly, which was competitively important and why a lot of these acquisitions,

I think, came to us instead of our competitors and ended up being very good acquisitions over time that a lot of competitors wished they had gotten instead.

The second thing that is important in an acquisition is to share the same vision. For example, Zuckerberg declared that the main reason why he was able to buy Oculus for less than 5 billion dollars was because he shared the same vision of collaboration with this company.
The most important thing was aligning and getting excited about a shared vision and about how we're going to work together," Mark declared.

But, Mark Zuckerberg also admitted that sometimes he is trying to scare small startups by making them imagine how difficult it would be to run their businesses without any help.

That's less my thing, but I think if you are trying to help convince people that they want to join you, helping them understand all the pain that they would have to go through to build it out independently is a valuable tactic," he declared. 

However, the main secret of buying new companies is moving fast.

Some of the bigger acquisitions that we have done, like Instagram and WhatsApp, which were each more than a billion dollars, we had to move quickly because other companies — whether it was Google or, you know, Twitter or Apple, or whatever the companies were — were also trying to talk to these companies and buy them," Mark Zuckerberg concluded.
What is Facebook’s secret when it buys new companies? Reviewed by Mike Beasley on 5:26 AM Rating: 5
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