Facebook pays $19 billion to acquire WhatsApp
Facebook has splashed out more than $US19 billion to buy acquire popular smartphone messaging app WhatsApp to expand its mobile user base.
The deal includes $US12 billion in Facebook stock, $US4 billion in cash and another $3 billion in restricted shares.
This means WhatsApp founders Jan Koum and Brian Acton will now have a 7.9 per cent share of Facebook.
This acquisition makes WhatsApp now more worth more than half of Twitter’s market value.
WhatsApp is an iOS and Android app with more than 450 million users worldwide with more 27 billion messages sent through the service worldwide on a single day compared with 21 billion through regular SMS channels.
WhatsApp has a remarkably high daily user engagement of more than 70 per cent of its users. It has been growing at a rate of a million new users per day.
“WhatsApp will remain autonomous and operate independently,” co-founder Jan Koum said on the WhatsApp blog.
“You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using.
“And you can still count on absolutely no ads interrupting your communication.
“There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.”
Facebook was said to be circling WhatsApp since 2012. The partnership is a play by Facebook to bring even greater connectivity to their platform and build an even larger user base.
“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, in a statement.
“I’ve known 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.”
The deal comes after Facebook’s offer of $US3.2 billion to buy SnapChat was rejected last year.
Facebook also paid $US1 billion dollars to buy Instagram in 2012.