Facebook
is buying mobile messaging service WhatsApp for $19 billion in cash and
stock, by far the company's largest acquisition and bigger than any
that Google, Microsoft or Apple have ever done. The world's biggest
social networking company said Wednesday that it is 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. In a filing to the Security and Exchange Commission (SEC),
Facebook announced the acquisition. "The acquisition supports Facebook
and WhatsApp's shared mission to bring more connectivity and utility to
the world by delivering core internet services efficiently and
affordably. The combination will help accelerate growth and user
engagement across both companies," the filing stated. "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. "I've known Jan for a long time and I'm excited to partner with
him and his team to make the world more open and connected." The
company also announced that WhatsApp's cofounder and CEO Jan Koum would
join Facebook's board of directors. whatsappp111Facebook on Wednesday,
announced that it will acquire the popular cross-platform mobile
messaging company, WhatsApp for $19 billion. The deal translates to
roughly 9 percent 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. In a separate blog post on the
WhatsApp site, Koum said that the partnership with Facebook "will give
WhatsApp the flexibility to grow and expand". "WhatsApp will remain
autonomous and operate independently. 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," he
said. The price stunned Gartner analyst Brian Blau. "I am not surprised
they went after WhatsApp, but the amount is staggering," he said.
Facebook likely prizes WhatsApp for its audience of 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. "This is a bet on the future for Facebook," Blau
said. "They know they have to expand their business lines. WhatsApp is
in the business of collecting people's conversations, so Facebook is
going to get some great data." In that sense, the acquisition makes
sense for 10-year-old Facebook as it looks to attract its next billion
users while keeping its existing 1.23 billion members, including
teenagers, interested. The company has said it will develop a
"multi-app" strategy, creating its own applications that exist outside
of Facebook and acquiring others. "Facebook seems to be in
acknowledgement that people are using a lot of different apps to
communicate," said eMarketer analyst Debra Aho Williamson. "In order to
continue to reach audiences, younger in particular, it needs to have a
broader strategy...not put all its eggs in one basket." Facebook said it
is keeping WhatsApp as a separate service, just as it did with
Instagram, which it bought for about $715.3 million in two years ago.
WhatsApp has more than 450 million monthly active users. In comparison,
Twitter had 241 million users at the end of 2013. Facebook CEO Mark
Zuckerberg says WhatsApp is on path to reach a billion users. "The
services that reach that milestone are all incredibly valuable,"
Zuckerberg said. WhatsApp, a messaging service for smartphones, lets
users chat with their phone contacts, both one-on-one and in groups. The
service allows people to send texts, photos, videos and voice
recordings over the Internet. It also lets users communicate with people
overseas without incurring charges for pricey international texts and
phone calls. It costs $1 per year and has no ads. The deal is expected
to close later this year. Shares of Menlo Park, California-based
Facebook slid $1.12 to $66.94 in extended trading after the deal was
announced. Associated Press with inputs from Arlene Chang/Firstpost
Facebook
is buying mobile messaging service WhatsApp for $19 billion in cash and
stock, by far the company's largest acquisition and bigger than any
that Google, Microsoft or Apple have ever done. The world's biggest
social networking company said Wednesday that it is 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. In a filing to the Security and Exchange Commission (SEC),
Facebook announced the acquisition. "The acquisition supports Facebook
and WhatsApp's shared mission to bring more connectivity and utility to
the world by delivering core internet services efficiently and
affordably. The combination will help accelerate growth and user
engagement across both companies," the filing stated. "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. "I've known Jan for a long time and I'm excited to partner with
him and his team to make the world more open and connected." The
company also announced that WhatsApp's cofounder and CEO Jan Koum would
join Facebook's board of directors. whatsappp111Facebook on Wednesday,
announced that it will acquire the popular cross-platform mobile
messaging company, WhatsApp for $19 billion. The deal translates to
roughly 9 percent 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. In a separate blog post on the
WhatsApp site, Koum said that the partnership with Facebook "will give
WhatsApp the flexibility to grow and expand". "WhatsApp will remain
autonomous and operate independently. 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," he
said. The price stunned Gartner analyst Brian Blau. "I am not surprised
they went after WhatsApp, but the amount is staggering," he said.
Facebook likely prizes WhatsApp for its audience of 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. "This is a bet on the future for Facebook," Blau
said. "They know they have to expand their business lines. WhatsApp is
in the business of collecting people's conversations, so Facebook is
going to get some great data." In that sense, the acquisition makes
sense for 10-year-old Facebook as it looks to attract its next billion
users while keeping its existing 1.23 billion members, including
teenagers, interested. The company has said it will develop a
"multi-app" strategy, creating its own applications that exist outside
of Facebook and acquiring others. "Facebook seems to be in
acknowledgement that people are using a lot of different apps to
communicate," said eMarketer analyst Debra Aho Williamson. "In order to
continue to reach audiences, younger in particular, it needs to have a
broader strategy...not put all its eggs in one basket." Facebook said it
is keeping WhatsApp as a separate service, just as it did with
Instagram, which it bought for about $715.3 million in two years ago.
WhatsApp has more than 450 million monthly active users. In comparison,
Twitter had 241 million users at the end of 2013. Facebook CEO Mark
Zuckerberg says WhatsApp is on path to reach a billion users. "The
services that reach that milestone are all incredibly valuable,"
Zuckerberg said. WhatsApp, a messaging service for smartphones, lets
users chat with their phone contacts, both one-on-one and in groups. The
service allows people to send texts, photos, videos and voice
recordings over the Internet. It also lets users communicate with people
overseas without incurring charges for pricey international texts and
phone calls. It costs $1 per year and has no ads. The deal is expected
to close later this year. Shares of Menlo Park, California-based
Facebook slid $1.12 to $66.94 in extended trading after the deal was
announced. Associated Press with inputs from Arlene Chang/Firstpost
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