In one of the biggest acquistion in technology arena, Facebook is buying mobile messaging service WhatsApp for whopping $19 billion in cash and stock. This is company’s largest acquisition and far bigger than any that Google, Microsoft or Apple have ever done.
As per the deal, Facebook will be paying $12 billion in Facebook stock and $4 billion in cash for WhatsApp. In addition, the app’s founders and employees – 55 in all – will be granted restricted stock worth $3 billion that will vest over four years after the deal closes.
The deal translates to roughly 9 per cent of Facebook’s market value. In comparison, Google’s biggest deal, Motorola Mobility, stood at $12.5 billion, while Microsoft’s largest was Skype at $8.5 billion. Apple, meanwhile, has never done a deal above $1 billion. The deal price has stunned many analysts.
WhatsApp has more than 450 million monthly active users. In comparison, Twitter had 241 million users at the end of 2013. WhatsApp is used by teenagers and young adults who are increasingly using the service to engage in online conversations outside of Facebook, which has evolved into a more mainstream hangout inhabited by their parents, grandparents and even their bosses at work. Facebook CEO Mark Zuckerberg says WhatsApp is on path to reach a billion users. By the way, Facebook has 1.23 billion active members.
Facebook is acquiring WhatsApp to win the market for messaging, an indispensable utility in a mobile era. Smartphone-based messaging apps are now sweeping across North America, Asia and Europe.
Facebook CEO Zuckerberg has posted the following message on facebook on the $19 billion WhatsApp acquisition:
“I’m excited to announce that we’ve agreed to acquire WhatsApp and that their entire team will be joining us at Facebook.
Our mission is to make the world more open and connected. We do this by building services that help people share any type of content with any group of people they want. WhatsApp will help us do this by continuing to develop a service that people around the world love to use every day.
WhatsApp is a simple, fast and reliable mobile messaging service that is used by over 450 million people on every major mobile platform. More than 1 million people sign up for WhatsApp every day and it is on its way to connecting one billion people. More and more people rely on WhatsApp to communicate with all of their contacts every day.
WhatsApp will continue to operate independently within Facebook. The product roadmap will remain unchanged and the team is going to stay in Mountain View. Over the next few years, we’re going to work hard to help WhatsApp grow and connect the whole world. We also expect that WhatsApp will add to our efforts forInternet.org, our partnership to make basic internet services affordable for everyone.
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.
WhatsApp had every option in the world, so I’m thrilled that they chose to work with us. I’m looking forward to what Facebook and WhatsApp can do together, and to developing great new mobile services that give people even more options for connecting.
I’ve also known Jan for a long time, and I know that we both share the vision of making the world more open and connected. I’m particularly happy that Jan has agreed to join the Facebook board and partner with me to shape Facebook’s future as well as WhatsApp’s.
Jan and the WhatsApp team have done some amazing work to connect almost half a billion people. I can’t wait for them to join Facebook and help us connect the rest of the world”.
(Inputs from agencies)