Before I postulate on ‘why’ and ‘why now’ questions, allow me to provide some color the context. Social media, as a tool and consumer interactions in social networks, I would contend are still in fairly early stages of evolution compared to other collaboration media like voice and email, which are not only mature but well understood. Given this, one can perhaps argue the jury may be out on what and how consumer behavior in social media in ‘steady state’ may look like. Having said that, today’s state of affairs of consumer interaction in social media seems to be a combination of being in public as well as private, depending on the context consumers want to collaborate/communicate in. Actually, to some degree, the choice of network is also dictated by their friends/family/co-workers who may happen to indirectly coerce one to be in one or more networks they are in — i.e., the On-net effect. It’s evident in the adoption of networks like Twitter, FB, Instagram, Whatsapp, G+, Linked IN and more, where most or all are being used by many consumers for contextual and On-net reasons.

The implicit strain one may observe here, regardless of why people are where they are in a multi-app world, is one of consumer loyalty, or lack of it thereof. Another way to say could be that consumers have been acclimatized to be loyal to multiple services that meet their needs particularly for communication and collaboration. The emergence of the ‘app-ecosystem’ and the convenience of mobile apps at a low or no-price format make it even easier for consumers to adopt multiple services from competing service providers. This is especially the case in emerging markets where one can observe consumers even have multiple services providers’ network in a single cell phone (multi-SIM enabled phone devices), not to mention multiple apps on the same device as it is here in the western world as well.

I believe, it’s this lethal combination of uncertainty around consumer loyalty, mixed with a nascent and fickle nature of consumer behavior in an otherwise fairly young paradigm called Social networking, may be good enough reasons why companies in the space like FB, GOOG and others get paranoiac and seem to be on the prowl for the next cannibalizing service or technology that they perceive may disrupt them. The behavior of passionate founders in fast paced companies like Facebook, Google etc. is many times is quoted to be not just from competition of current players in the market but more from fear of uncertainty of a kid in a garage coming up with a focused solution to a well-defined problem.

With this backdrop, it’s understandable why Facebook or Google make these perceived moonshot bets. In many cases I have to contend they don’t know what they don’t know and therefore have to hedge for uncharted uncertainties to avoid being the next MySpace or Kodak (w all due respects). These bets are most likely CALL Options buying the optionality/flexibility to do one or more of the following — Option to Shelve competition (WhatsApp), Option to expand geographically (WhatsApp, Drones), Option to enter new product categories (Oculus, Drones) etc. If that may address a dimension of ‘Why’, it’s a legit argument of Why now and Why at this high cost? My read is Zuck has been smart to leverage the froth in the share price and used that as the currency to lock these options in a timely manner. The premium or the strike price of the CALL option is always questionable and anybody’s guess as to whether the acquired companies will see the light of day or mature into their valuation sometime in the future.

One good news for investors amid questionable valuation is that, Zuckerberg so far has stuck to the ground rules — “To make the world more Open and Connected”. Facebook’s mission statement like Google’s is to broad-brushy that it appears that all of these acquisitions fall within the purview of their stated mission and that’s more or less not that disconcerting.