Facebook Inc. (FB), the world's largest social networking website, was founded by CEO Mark Zuckerberg and several Harvard College roommates in 2004. The company's name initially was FaceMash, which was changed to TheFacebook, eventually dropping "The" from its name to become, simply, Facebook. Zuckerberg and his co-founders initially launched the service for their Harvard classmates, quickly expanding it to other universities and then to the general public. The company since then has grown into a global giant with 2.5 billion users and a market cap of $479.2 billion. The company reported FY 2019 net income of $18.5 billion on $70.1 billion in revenue, nearly all of which came from advertising.

Facebook has expanded far beyond its original social networking platform since its founding 16 years ago. Its products also include messenger services, photo and video sharing, augmented reality, and many other apps and services. Acquisitions have been key to growing these businesses and Facebook's revenue in general. Facebook's strategy has been to buy potential rivals before they can get too big. In the process, the company sometimes has paid exceptionally high prices for some deals. The company has also drawn attention from the Federal Trade Commission (FTC) due to potential anticompetitive practices, with the FTC recently demanding data on unreported purchases from Facebook as well as other big tech companies.

Below, we look in more detail at Facebook's 5 biggest acquisitions. The company does not provide a breakdown of how much profit or revenue each acquisition currently contributes to Facebook.

Instagram

  • Type of Business: Photo and video-sharing app
  • Acquisition Cost: $1.0 billion
  • Acquisition Date: April 9, 2012 

Instagram is a photo and video-sharing social networking platform that was launched in 2010. Through the Instagram app, users can upload, edit, and tag photos and videos. The company remained independent up until it was acquired by Facebook for $1.0 billion in 2012. While Facebook bought Instagram as the photo-sharing company was garnering significant attention from venture capital firms and other investors. Some estimates indicate that Instagram generates more advertising revenue than its parent company.

When it acquired Instagram, Facebook opted to build and grow the Instagram app independently from Facebook's main platform; Instagram remains a separate platform to this day. The price that Facebook paid for Instagram, which at that time was generating no revenue, reflects Facebook's willingness to pay a premium for young companies.

WhatsApp

  • Type of Business: Mobile messenger service
  • Acquisition Cost: $19.0 billion
  • Acquisition Date: February 19, 2014 

WhatsApp is a messenger and calling service available to users throughout the world. The platform was launched in 2009 as a low-cost alternative to standard text messaging services. Throughout much of its history, WhatsApp has allowed users to send messages and make calls directly to other users for no cost, regardless of location. Users can also send photos, videos, and documents over the platform. Facebook bought WhatsApp at a time when the smaller company boasted more than 400 million active monthly users, making it a fast-growing potential rival to Facebook's platform.

When Facebook purchased WhatsApp, it was an independent company that had recently been valued at $1.5 billion. Although it is unclear exactly how much revenue WhatsApp generates, some estimates are that WhatsApp revenue will be as high as $5 billion by 2020.

Oculus VR

  • Type of Business: Virtual reality technology company
  • Acquisition Cost: $2.0 billion
  • Acquisition Date: March 25, 2014 

Just weeks after announcing its acquisition of WhatsApp, Facebook followed up by buying virtual reality hardware and software company Oculus VR. This company was founded in 2012 and is best known for its Oculus Rift product, a virtual reality headset that was designed for video gaming. Since Facebook's purchase of Oculus VR in 2014, the subsidiary has made multiple acquisitions of its own. Perhaps the most prominent was the 2015 purchase of Surreal Vision, a company specializing in 3D scene mapping reconstruction.

At the time that Facebook acquired Oculus VR, the company had only produced a development prototype of what would become its popular headset product. Facebook's purchase of Oculus VR gave it an instant presence in the virtual reality market at a time when developers were showing growing interest in VR.

Onavo

  • Type of Business: Mobile web analytics
  • Acquisition Cost: $100–200 million (estimated)
  • Acquisition Date: October 2013

Founded in 2010, Israeli company Onavo performs web analytics on other mobile apps to determine customer usage. Facebook acquired Onavo in October 2013 for an undisclosed amount that some analysts estimated to be between $100 million and $200 million. At the time of the acquisition, Onavo was an independent company. Although Onavo is not one of Facebook's largest acquisitions, Onavo's technology may have allowed Facebook to make crucial early determinations about other companies and apps to acquire. Onavo has occasionally been classified as spyware, forcing Facebook to pull Onavo from both the iOS and Android app stores in the face of criticism.

Beluga

  • Type of Business: Messaging service
  • Acquisition Cost: Undisclosed
  • Acquisition Date: March 2, 2011

Messaging app service Beluga, founded in 2010, was acquired by Facebook a year later. Facebook bought Beluga in the midst of the startup's fundraising process for an undisclosed sum. In buying Beluga, Facebook acquired the technology that eventually became the social media company's highly successful Messenger platform. In the process, Facebook again expanded its offerings and eliminated a potential rival.

Facebook Diversity & Inclusiveness Transparency

As part of our effort to improve the awareness of the importance of diversity in companies, we have highlighted the transparency of Facebook's commitment to diversity, inclusiveness, and social responsibility. The below chart illustrates how Facebook reports the diversity of its management and workforce. This shows if Facebook discloses data about the diversity of its board of directors, C-Suite, general management, and employees overall, across a variety of markers. We have indicated that transparency with a ✔.

Facebook Diversity & Inclusiveness Reporting
  Race Gender Ability Veteran Status Sexual Orientation
Board of Directors          
C-Suite
 
       
General Management ✔ (U.S. Only)      
Employees ✔ (U.S. Only)