In a major development, Facebook Inc. has acquired Kustomer Inc., a New York-based software company. The new acquisition will help the tech giant to help businesses manage customer conversations from multiple services on one dashboard.
The deal was valued at more than $1 billion, said a person familiar with the deal who asked not to be identified because the terms were private.
The social media giant made the deal to bolster efforts to monetize its messaging business, which is expanding to include customer-service products that help companies interact with people via chat apps, like WhatsApp and Messenger.
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Facebook has made customer service a central part of its business strategy on WhatsApp, the world’s most popular messaging service. It has signed deals with commerce-related businesses in India and Indonesia, and is working on a payments feature to launch in key markets such as Brazil. The hope is that businesses will one day use WhatsApp as their de facto website, allowing customers to browse their product catalogs, make purchases and interact directly with the companies for customer service needs all inside the app.
WhatsApp currently makes money by charging large businesses to message customers on the app in lieu of email. Some customer service platforms, like Kustomer, use WhatsApp software to let businesses manage these interactions on a single interface. Facebook executives said Kustomer will continue to operate the business as usual while the acquisition goes through regulatory review.