Facebook acquires WhatsApp in $19bn deal

Facebook has made its biggest acquisition to date with the purchase of WhatsApp for $19 billion.

Social networking giant Facebook is betting heavily on messaging services as it acquires WhatsApp, a chat app that helps users avoid text message charges.

In an announcement, Facebook said the deal would go ahead for $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also includes an additional $3 billion in restricted stock units for WhatsApp's founders and employees.

WhatsApp has 450 million users, and according to the firm, 70 percent of those people are active on any given day. WhatsApp claims it signs up one million new users a day. The company offers both a free version of the application as well as a premium subscription.

The acquisition is Facebook's largest to date.

Facebook founder Mark Zuckerberg called the company's services "incredibly valuable," and says the deal will "support Facebook and WhatsApp's shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably."

On a conference call discussing the acquisition, WhatsApp co-founder Jan Koum said he would continue to operate the company "autonomously," and will also become a Facebook board member.

Speaking to the BBC, consultant Ben Bajarin said:

"WhatsApp is on a path towards a billion users. They're growing exponentially -- much, much faster than Facebook.
For Facebook this is a key growth area where, even if they don't monetise this product, this is a way that Facebook can get the next billion smartphone consumers into their ecosystem [...] to touch them and engage with them in other ways than just the Facebook platform."

Via: BBC

This post was originally published on Smartplanet.com

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