WhatsApp acquired by Facebook for whooping $19 bn

Feb 22 2014, 10:14 IST
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SummaryFacebook will acquire popular mobile messaging service WhatsApp for a whopping USD 19 billion in a cash and stock deal, bolstering the social networking giant's presence in mobile communications through its largest-ever acquisition.

Facebook will acquire popular mobile messaging service WhatsApp for a whopping USD 19 billion in a cash and stock deal, bolstering the social networking giant's presence in mobile communications through its largest-ever acquisition.

The hefty transaction - that includes USD 12 billion worth of Facebook shares, USD 4 billion in cash and USD 3 billion in restricted stock units - will boost the world's biggest social network by adding the 450 million users of WhatsApp, including a significant number of youth.

"The acquisition supports Facebook and WhatsApp's shared mission to bring more connectivity and utility to the world by delivering core Internet services efficiently and affordably," Facebook said in a statement.

The Mark Zuckerberg-led firm, that raised USD 16 billion in the richest tech sector public stock offering in 2012, said its biggest acquisition so far will not impact WhatsApp's brand, which will be maintained and the company's headquarters will remain in California's Mountain View.

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

Koum will join Facebook Board of Directors under the agreement, that will grant WhatsApp's founders and employees restricted stock units to vest over four years following the closing of the deal.

Koum said in a blog post: "Today we are announcing a partnership with Facebook that will allow us to continue on that simple mission.

"Doing this will give WhatsApp the flexibility to grow and expand, while giving me, (co-founder) Brian (Acton), and the rest of our team more time to focus on building a communications service that's as fast, affordable and personal as possible."

WhatsApp's core messaging product and Facebook's existing messenger app will continue to operate as standalone applications.

WhatsApp, which will continue to operate independently, has built a leading and rapidly growing real-time mobile messaging service with over 450 million people using the service each month. Of this number, 70 per cent users are active on a given day.

The messaging volume of WhatsApp is approaching the entire global telecom SMS volume and the company is currently adding over one million new registered users per day.

Facebook's most recent acquisition attempt failed when Zuckerberg tried to acquire another messaging firm SnapChat last year for a reported USD three billion.

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