One of the biggest the social network company in the world “Facebook” had just bought another social network company based on a location-based called “Gowalla”. In class we’ve learned about the Great Merger Movement, we saw many small firms consolidating into giants with large market share, and there are many reasons why big firms want to buy out small firms, it will eliminate the competitors in the market in order to achieve a larger customers with lower prices or other factors and eventually being able to adjust to a relative high price in later time. So as for the social network company “Facebook”, it bought another competitor social network company “Gowalla”, it might be an economic strategy to eliminate other competitors in the same market as well as being able to gain a better development in the social network in order to be more competitive than other companies in the same field, and the trend of the Merger movement will be keep growing in the future and we will see more companies buying out others in the market.
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