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Why Facebook’s Acquisition of TBH Could Be a Win-Win

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Facebook acquired TBH for an undisclosed amount

As we discussed in the previous article, Piper Jaffray’s survey noted that Snap’s (SNAP) Snapchat is still the preferred social media platform by US teens. However, Facebook (FB) is working to beat Snapchat on that account as well.

On October 16, Facebook acquired TBH, a polling app, which is popular among teens. TBH stands for “to be honest.” The financial terms of the deal have yet to be disclosed. Snap stock fell 2.6% on Monday.

TBH was launched on August 3, 2017. According to the Wall Street Journal, Facebook noted that TBH’s founders will be employed by Facebook, will run the app, and will oversee the app’s expansion.

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Why the Facebook–TBH deal is a win-win

The TBH app allows users to anonymously answer multiple-choice questions about friends, who receive the poll results. Unlike other apps, feedback received on TBH is only positive. Facebook’s acquisition of TBH could be a win-win for both parties. Facebook can now offer an app to compete with Snap in the US teen demographic.

TBH would not only receive money from Facebook, but it could also see its popularity grow. When Instagram was purchased by Facebook in 2012, it barely had 80 million monthly active users. It now has 800 million monthly active users—a tenfold increase.

WhatsApp saw its MAU (monthly active users) increase from 450 million users when it was purchased in 2014 to its current level of 1.3 billion.

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