Another day, another major acquisition.
Except, $16 billion in a mix of stock and cash for WhatsApp, a mobile instant messenger program? The 55 employees at the Silicon Valley startup can say goodbye to your current neighborhoods...
WhatsApp confirmed "nothing" will change for its users in a blog post, published Wednesday. Facebook said it will keep the company as an independent operation within the social giant, suggesting that while Facebook integration may be pushed over time, the deal was nothing short of a land-grab for its user base.
An estimated 450 million people use WhatsApp each month, with 70 percent of those using it on any given day. That's a huge feat for any mobile-focused startup, almost matching Facebook's active user base ratio.
WhatsApp's user base is significantly larger than Twitter, based on its own initial public offering documents posted last year.
It wasn't so long ago Facebook bought Instagram for $1 billion in cash and stock. While the financial figure was far lower, Instagram remains relatively independent from the social giant, but added roughly 32 million users at the time. Now? It's significantly more.
Facebook confirmed the deal in a note on Wednesday, while its 8-K filing with the U.S. Securities and Exchange Commission dished out some of the details.
The deal will go ahead for $16 billion in total, made up of $12 billion worth of Facebook shares and $4 billion in cash. The agreement, the company says, offers an additional $3 billion in restricted stock to WhatsApp founders and employees that will vest for four years following the deal's closing.
WhatsApp founder Jan Koum, who will join Facebook's board, said he was "excited and honored" to partner with Facebook. Meanwhile, the social network's founder and chief executive Mark Zuckerberg shared the same sentiments.
Zuckerberg expanded in a post on his Facebook wall shortly after the news broke:
"WhatsApp will complement our existing chat and messaging services to provide new tools for our community. Facebook Messenger is widely used for chatting with your Facebook friends, and WhatsApp for communicating with all of your contacts and small groups of people. Since WhatsApp and Messenger serve such different and important uses, we will continue investing in both and making them each great products for everyone."
From the 8-K filing, the deal is expected to close later in 2014, with a pegged date of mid-August. The deal will also be subject to regulatory approval.