Facebook's Plan to Spot the Next Big Social App
Mark Zuckerberg has done a pretty good job of keeping his finger on the pulse of social media and related technologies. But as Facebook (NASDAQ: FB) grows bigger and expands its reach, it's getting harder and harder for the company to stay ahead of the curve. Meanwhile, the company is coming under increasing regulatory scrutiny, so big acquisitions like those it made with Instagram and WhatsApp may be harder to pull off going forward.
That may be why Facebook is reportedly hiring tech investors for a venture capital fund to help it spot the next big thing in social media and potentially acquire it (or at least a substantial stake in it) before it would raise antitrust issues. A Facebook spokesperson said the company has already hired an investor to lead the multi-million dollar fund, but didn't confirm the size of the fund, according to Axios.
Facebook is following in the footsteps of fellow FAANG stock Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), which has operated a venture capital fund since 2009. Such a venture capital fund can often uncover potential acquisition targets. For example, Google Ventures invested in Nest before its parent company acquired the entire business in 2014. Facebook may find similar successes, and it has plenty of cash to pursue it.
Source Fool.com
