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Facebook’s largest acquisition ever was announced this week. The company said it would pay at least $16 billion for WhatsApp, a text messaging application with 450 million users around the world who pay little or no money for it. The purchase price dwarfs the $1 billion Facebook paid for Instagram, the photo-sharing service.

1. Explain Friedman’s concept of collaboration.
2. What is Zuckerberg’s strategic plan for WhatsApp? How can the company get a return on its investment?
3. Based on forecasts, how much did Facebook potentially pay per person that is projected to use this app?
4. Explain why this acquisition is a defensive effort by Facebook.
5. What are restricted stock units? What percentage of this deal is cash?

Sources: Gelles, D. and V. Goel. (2014). Facebook Enters $16 Billion Deal for WhatsApp. The New York Times, Feb. 19 (Retrievable online at

ABC News Staff. (2014).’This Week’: Facebook and WhatsApp. ABC, Feb.23 (Retrievable online at