Facebook to acquire WhatsApp for $19 billion

post Thursday February 20, 2014

Yesterday Facebook announced that is has reached a definitive agreement to acquire WhatsApp for $19 billion. Facebook is making the purchase in a mix of cash and stock. WhatsApp will receive $12 billon in Facebook shares, $4 billion in cash and an additional $3 billion in restricted shares that will be paid out to executives at a later date. The company will operate as an autonomous unit.

WhatsApp has built a leading and rapidly growing real-time mobile messaging service, with:

• Over 450 million people using the service each month
• 70% of those people active on a given day
• Messaging volume approaching the entire global telecom SMS volume
• 19 billion messages sent via WhatsApp each day

Continued strong growth, currently adding more than 1 million new registered users per day.

With WhatsApp you can send unlimited free text-messaging and pictures to you contacts and it is now the best downloaded app. Nowadays WhatsApp has more than 450 million users around the world and it claims that more than 1 million people register every day.  Last year Google made a bid of $1 billion on Whatsapp but Facebook has now made the successful, enormously higher, bid.

"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg, Facebook founder and CEO. "I've known Jan for a long time and I'm excited to partner with him and his team to make the world more open and connected."

Jan Koum, WhatsApp co-founder and CEO, said, “WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We're excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.”

Facebook and Whatsapp share a mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably. This acquisition supports this mission.

The acquisition of WhatApp is the largest for Facebook until now, the acquisition of Instagram cost Facebook only $1 billion. This acquisition is in line with Facebook needing a more steady position in the mobile business; teenagers are cooling on its service. With WhatsApp they make a big step because it is particularly big in Europe and Latin America where its market penetration is thought to top 80% in countries including Brazil, Germany, Portugal and Spain.

Marcos Sanchez, vice president of App Annie, an analyst specializing in mobile technology said: “Facebook understands there is a generational shift in the way people connect.” He also said that Social messaging services are attracting a younger audience and that they seem to prefer something more ephemeral, something that changes moment by moment. WhatsApp gives Facebook a major player in that space.

Source:  Facebook  ,  BBC  ,  The Guardian
Image courtesy of  FrameAngel / FreeDigitalPhotos.net
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