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Facebook-WhatsApp Deal: Smart Move or Just Plain Stupid?

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There has been another huge purchase by social media site Facebook. It is buying WhatsApp, the fast-growing instant messaging service.

whatsapp

Facebook Chief Executive Mark Zuckerberg, who is paying $19 billion (13.8 billion euros), praised the speed at which his new acquisition has grown: “No one in the history of the world has ever done something like this.”

In the five years since it was set up, WhatsApp has amassed over 450 million users, adding an average of one million daily.

It handles 50 billion messages every day – and growing – even as the number of SMS texts that are sent is declining.
Eighteen billion of those are outgoing messages, many to multiple WhatsApp recipients. As with other messaging services, users can send photos, videos, and audio messages.

Facebook obviously sees this as the future, as Tim Bradshaw, a technology reporter with the Financial Times explained: “This is a very hot market at the moment, there have been many different of these chat apps popping up. There’s WeChat in China, there’s Line in Japan and other parts of Asia – but WhatsApp is by far the biggest of all of them, which is why Facebook has paid such a huge price.”

The message of youth

The advantage for Facebook is that it gets access to younger users who have never joined the social networking site and are not likely to.

They are increasingly using instant messaging, via their internet connected smart phones, rather than text messages.
“When you look at how much growth WhatsApp has managed to achieve over the last number of years from about 200 million users to 450 million users – which is way more than the likes of Twitter – I think it is a way for Facebook to engage the younger market it has been losing favour with over recent quarters,” said Brenda Kelly, a market analyst with IG.

Facebook – which has seen its growth slow recently – also gains a massive amount of data about real-time social interactions.

$19 billion!

On Wall Street investors obviously felt it was a very expensive acquisition – with Facebook paying $42 (30.6 euros) for every WhatsApp customer – and its shares fell in value.

Rick Summer, an analyst with Morningstar, said: “This is a tacit admission that Facebook can’t do things that other networks are doing.”

He pointed out that Facebook had photo-sharing and messaging before it bought Instagram and WhatsApp.

“They can’t replicate what other companies are doing so they go out and buy them. That’s not all together encouraging necessarily and I think deals like these won’t be the last one and that is something for investors to consider.”

It is not clear how Facebook can make any real money from WhatsApp. Zuckerberg said there are no plans to run adverts on the service.

Ukrainian roots

WhatsApp is a Silicon Valley startup fairy tale, founded by a Ukrainian immigrant who dropped out of college,Jan Koum, and a Stanford alumnus, Brian Acton.

Chief Executive Officer Koum, 37, grew up mostly in the Ukraine having arrived in the United States at the age of 16, and his eastern European background was key to WhatsApp’s creation, according to Jim Goetz, a partner at venture capital group Sequoia Capital which backed the company.

Unlike companies such as Google and Facebook, which try to learn as much as possible about each user, WhatsApp does not collect personal information such as name, gender, or age, Goetz wrote in a blog post, and messages are deleted from servers once delivered.

“It’s a decidedly contrarian approach shaped by Jan’s experience growing up in a communist country with a secret police,” Goetz wrote. “Jan’s childhood made him appreciate communication that was not bugged or taped.”

Koum’s view was evident in a tweet he wrote last year about Iran and Turkmenistan blocking WhatsApp. “When government gets in the way, consumers and freedom to communicate suffers,” he wrote.

He also sees advertising as an imposition. “When advertising is involved, you the user are the product,” Koum wrote in a 2012 blog post, disparaging the effort other companies make to collect personal data.

That same year, he quoted singer Kanye West in a tweet, writing, “You think you free but you a slave to the funds, baby.”

Last month, as the crisis in his home country of Ukraine escalated, Koum posted photos of revolutionaries and tweeted “praying for peace and quick resolution to the crisis #ukraine #freedom.”

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How to Make Dramatic Improvements to Your E-commerce Business

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Every online entrepreneur wants to enjoy phenomenal success. However, you could be facing various obstacles that could prevent your company from reaching its full potential, such as a competitive market, the wrong platform, poor onsite content, or a lack of marketing know-how. To increase your brand recognition, traffic and sales, find out how to make dramatic improvements to your e-commerce business.

Publish Superb Product Pages

If you want to convince visitors to invest in your products, you must develop impressive product pages that will effectively highlight your inventory and increase your sales. For example, you must only feature high-quality, professional images of your items, which should be complemented with informative, compelling product descriptions. Your product descriptions must state:

  • What your product is
  • What your product does
  • Why it’s better than any similar item on the market

It could convince a potential customer that you only provide high-quality, reliable products, which are worth their time and money.

Transition to a Better E-commerce Platform

If you are constantly battling with website maintenance issues and want to easily manage the customer experience, it might be wise to move to a better e-commerce platform. For example, if you currently use either Magento Community or Magento Enterprise, compare Magento against another platform, such as Shopify Plus, which offers multi-channel capabilities and improved security.

Integrate Clear Call to Actions

A call to action can indicate the action you want a visitor to perform on a specific page, which could be buying a product, calling your business, completing a form, or downloading a guide or an eBook. To create a clear, compelling call to action, you should use a strong command verb, such as “Download,” “Subscribe” or “Buy.” You also could add a sense of urgency into a CTA by writing “Buy now to avoid disappointment” or “Shop soon! Sale ends this Friday.”

Master Upselling and Cross-selling

Most dependable e-commerce platforms provide features that allow brands to showcase related products to a customer’s order. If you want to increase your average sales, you must focus on upselling and cross-selling your products.

For example, upselling will require you to promote a similar item to a product already in a visitor’s basket. As it could match their needs and taste, it could potentially lead to a larger sale. If you are looking into cross-selling, you will need to feature complementary products to a customer’s order, such as jeans to match a t-shirt.

If you can master upselling and cross-selling on your e-commerce site, you could generate a bigger annual profit margin.

ecommerce example agenda daily

Proofread Your Website

If a visitor is unfamiliar with your brand, they will want to learn more about you before buying a product from your business. As a result, they might browse your web content to learn more about who you are and what you do.

Unfortunately, if your copy is riddled with grammatical errors, it can lead to a lack of trust in your brand and a lost sale. To secure their custom, you must routinely proofread your content to spot any mistakes, which could otherwise tarnish your credibility and profitability.

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5 Good Reasons you Should Not Start Your own Business

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Starting one’s own business can often be an amazing, life-changing decision that opens up doors into places you never thought you would go. There are hundreds of articles on the internet telling you how you should start your own business, and why you should, and they are generally full of good points. However; there are not enough telling you the truth. Starting your own business is hard.  We should be open to the fact that starting a business might not be a good idea for everyone.

5 reasons you should not start your own business

1) Starting a business takes an insane amount of work. I’ll keep this short and sweet. Work-life balance is a joke for founders of successful companies; this term does not apply to the startup phase of a business, particularly as the founder of that business.

2) When you fail, it is public and personal. It can be embarrassing to be fired from a job, but failing at starting a business is a much deeper wound, in my experience. A job is a part of you. Your business is a complete manifestation of you. The best way for me to describe the feeling of failing at entrepreneurship is by using an example from my childhood. I used to be a pitcher in baseball. You get on the mound. You throw the ball. The batter takes a big swing and connects big time. He hits it in a nice, high, long loft that lasts 5 to 15 seconds, where everyone can see it leave the stadium. It hurts the whole team, but the crowd is only looking at you. Just in case anyone might not be able to see you, in baseball the mound is elevated above the level of the field so everyone can get a good view of the pitcher. That’s the best way I can describe the feeling of failing at entrepreneurship, except it lasts a lot longer than 5 to 15 seconds.

3) Unfortunately, you may fail. One out of every two U.S. businesses fail in their first five years on the market. The chances of success can be good if you do it the right way, but most people quite simply don’t do it that way. And if you fail, your financial losses can be significant.

4) You can’t make friends at work. As the founder of a company, everyone works for you, so you can’t develop real friendships since you are the employer and “the boss.” There is an unequal relationship. Even when you do develop a friendship, you never quite know if it’s real. Entrepreneurship is a lonely occupation, and this inability to generate friendships at work is one of the most glaring representations of that fact.

5) Success (if you ever achieve it) take time. One of my complaints with how entrepreneurship is represented in popular culture is the idea that businesses either fly quickly or fail immediately. The truth is that it usually takes years to build a great business. Most entrepreneurs that I know who have successful businesses put in about three to five years of hard work to get their businesses off of the ground and to the point they’re self-sustaining.

Read also: 11 Easy Business Outfits to Snaz Up Your Day at the Office

If you’ve read this list and still feel like starting a business is for you, then you’ll probably make it. If you are willing to put in the hard work that it takes, go big, because you could be the next Bill Gates.

 

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Facebook’s Ventures into Cryptocurrencies is Larger than Many Expected

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Facebook is venturing into the cryptocurrency space for the second time and at least one major Wall
Street firm sees substantial upside if the company is able to monetize a cryptocurrency via the social
media giant. Facebook has been developing a cryptocurrency that could be part of a multibillion-dollar
revenue opportunity, according to the financial giant Barclays.

Huge Revenue Opportunity

While is is not clear exactly how Facebook will monetize a FaceCoin, Barclays is forecasting an additional
$19-billion in revenues by 2021. The cryptocurrency is being developed on a blockchain platform that
will be used for global payments. The company reportedly is planning to use its WhatsApp platform to
allow users to send payments instantaneously using the Messenger app. Facebook has not publicly
commented on the reports. One of the big differences between the FaceCoin and other
cryptocurrencies is that the digital Facebook currency would be a stable coin, tied to the value of fiat
currency such as the dollar. This would weed out speculators as there would not be the likelihood of the
price diverting from a fixed level.


A New Revenue Stream

Facebook is looking to monetize some of its assets, as target marketing to users on its platform has
come under fire. Expanding into payments could give Facebook another way to generate revenue.
Barclays bases its Facebook revenue estimates off of Google’s digital distribution service, which is also
the official app store for Android’s operating system. Google Play, generates $6 in revenue per user
now. A Facebook virtual currency would allow for more premium content to find its way back to
Facebook, according to Barclays, as companies re-establish themselves on the social network as a
strategic partner.

Issues With Payments in the Past

Facebook attempted a digital coin in 2010 that failed. Facebook credits were developed to be similar to a cryptocurrency. Users would prepay for these virtual coins using fiat currencies, and then use those
credits for purchases of apps. The company required a user to pay using a debit or credit card upfront.
The issue was that Facebook had to incur the changing fee from fiat currency to a cryptocurrency which
negatively impacted the value of the coins and the company’s ability to generate a profit. In the last
decade, the company has become much larger and has many apps and additional social media
platforms, which would provide a better chance of success.

According to Barclays, the size and scale of the FaceCoin project are much bigger than most expect. The
leader of Facebook’s blockchain and cryptocurrency efforts is former PayPal President David Marcus.
Facebook has been steadily building out its blockchain team.

What’s Next

There are still many challenges. Facebook has to relay to users the value of its cryptocurrency. Users will
need to see the benefit of using Facebook related to other payment methods that are established and
currently available. If the coin is successful, Facebook will likely be able to execute according to Barclays.

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