Following Facebook’s decision to acquire Ocatzen, the company from which Facebook’s contact importer technology is used, this technology helps seduce new users to see which of their friends are also on the site.
Why the Acquisition
Facebook needed a team which could monitor changes to third-party email providers thus enabling viral growth. Octazen, allows this capabability and also helps ensure that Facebook’s contact importer is a part of its organic user growth.
Although Facebook was not obliged to acquire the Octazen, one of the main benefits was to facilitate its developers to commit to Octazen’s technology.
Continuity
Octazen may have technological knowledge proprietary on Facebook’s contact importer on the way it process invitations. Subsequently, it follows that Facebook wishes to protect that aspect, Furthermore Facebook developers are now bound to an agreement in which their technology could not be used for any other organizations. In this case it is now understandable the statement on the Octazen Solutions website:
The Octazen team wanted to let you, our valued customers, know that the company recently received an offer to acquire most of the company’s assets and to employ those assets in a different direction. After carefully evaluating this offer, our team believes this is a wonderful opportunity of which we must take advantage.
As a result, effective immediately, Octazen will no longer accept new service contracts or renew existing service contracts, and will enter a transition period to wind down operations.
Financial
Facebook was paying fees to the Octazen. In this regard, Facebook may have felt as they were committed to paying fees for at least the next 3 to 5 years, that it made simple financial sense on the present value of the future outgoing cash flows in order to maintain the contact importer functionality would best be served with a simple acquisition.
Sum up
Facebook however stated internally that the acquistion was a simple “talent acquisition”, not much else is known about the business reasoning which led to the acquisition. However, all the above reasons seems plausible enough, and the the fact that it was a small acquisition is probably one reason Facebook didn’t make any type of formal announcement.
Others however, like Techcrunch have their own explanations conspiracy theory.
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