Facebook Pays $19 Billion to Buy WhatsApp
Published on: 19th Feb 2014
Note -- this news article is more than a year old.
Facebook has announced that it is paying USD19 billion to buy the OTT messaging service, WhatsApp. The deal is a mix of cash and shares and brings some 450 million messaging users over to the social media giant.
Facebook is offering USD16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp's founders and employees that will vest over four years subsequent to closing.
Facebook founder Mark Zuckerberg said that the deal had been arranged over just 11 days and described WhatsApp's services as "incredibly valuable".
Facebook has fast been moving towards becoming a mobile-first company, with the acquisition of Instagram, and the latest financial figures showing half its revenue now comes from mobile users.
Although WhatsApp charges $1 per year for its service, the addition of WhatsApp customer based makes Facebook potentially the largest mobile advertising agency in the market.
Jan Koum, WhatsApp co-founder and CEO, said, "WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We're excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world."
WhatsApp co-founder Jan Koum said he planned to operate the firm "independently and autonomously". He will though also become a member of Facebook's board of directors.