When news broke that Facebook bought WhatsApp for $19 billion, I was immediately reminded of Roberto Goizueta, Coca-Cola CEO from 1980 to 1997.
Goizueta’s constant rallying cry to Coke’s marketers was this:
“The average human body requires at least 64 ounces of liquid every day just to survive. For every person on this planet consuming at least 64 ounces is not an option; but choosing where those ounces come from is. I want you to increase the number of ounces per day that's sold by the Coca-Cola Company that human beings consume.”
I get where Mark Zuckerberg is coming from with his WhatsApp acquisition. The level of human engagement in digital social interactions continues to accelerate at a pace which is — just like consumption of life-sustaining liquids — apparently not an option. And he wants those interactions to be owned, each and every one of them, by Facebook.
While Facebook itself used to send something like 10 billion messages each day, WhatsApp stormed onto the scene and is now used by some 450 million users to send more than 19 billion messages a day. Zuckerberg needs to own those WhatsApp messages, just like Coke craves ownership of humanity’s each and every gulp. And for that, $19 billion is an easy spend.
Once an entrepreneurial startup itself (will Facebook still be around in 125 years?) Coca-Cola has made more than $20 billion in acquisitions in the past five years alone, including just recently when it invested $1.2 billion in Green Mountain Coffee Roasters.
Throughout its history, Coca-Cola has snapped up countless beverage brands around the world, sometimes for substantial sums of money. Coke acquisitions include Minute Maid, Thums Up (India), Barq’s Root Beer, Odwalla, Fuze, Coconut Water maker Zico, Honest Tea, and Innocent Smoothies. Back in 2007, Coke bought Glacéau, makers of Vitaminwater and Smartwater for a whopping $4.1 billion. And now Coke is partnering with Keurig to produce a DIY soda machine to rival upstart Sodastream.
In all, Coca-Cola owns or licenses and markets more than 500 nonalcoholic beverage brands, and, according to the company’s annual report, it sells more than 1.7 billion drinks each and every day of the year. Watch those NYSE:KO shareholders hit the “Like” button over and over. As an interesting aside, the market capitalization of these two companies is nearly identical, Coke stands at $163.67 billion, slightly topped by Facebook’s $174.7 billion.
Facebook’s paltry $1 billion acquisition of Instagram got them an app posting just 55 million photos a day. Do the math on WhatsApp, and it’s easy to see why $19 billion for 19 billion daily messages was an easy choice for Zuckerberg and his board.
For companies like Coca-Cola and Facebook, share of market and share of mind are vital to remaining fresh, relevant and successful. Marketing is no small piece of that, by the way. Coca-Cola reportedly plans to increase its marketing investments to $1 billion by 2016 (John Pemberton invented the drink’s secret formula, but marketing genius Frank Mason Robinson gave it its alliteratively catch name and timeless logo).
While figuring out how to capture more ounces of human liquid consumption, Roberto Goizueta reminded his company, “Everything we sell, we sell based on image.” And indeed today, Coca-Cola is the No. 1 consumer product fan page on Facebook.