Facebook acquires WhatsApp in a $19 billion deal

Facebook founder Mark Zuckerberg
Facebook founder Mark Zuckerberg

Facebook has announced the acquisition of WhatsApp, the famous instant messaging application for mobile devices. The price that Mark Zuckerberg’s (photo ©Guillaume Paumier) social network will pay is $16 billion of which $4 billion in cash and $12 billion in Facebook shares. An additional $3 billion in restricted Facebook shares will be paid as a bonus tied to WhatsApp’s founders and employees that will vest over four years subsequent to closing. WhatsApp Inc. CEO Jan Koum will enter Facebook’s board of directors.

WhatsApp is a well known today as it’s estimated that there are 450 million active users each month, of which 70% are active every day. The WhatsApp Inc. company was founded in 2009 by Brian Acton and Jan Koum, its CEO. The application created by this company had great success, also because it is cross-platform so it’s available on Android, iOS, BlackBerry, Windows Phone and more. Nowadays billion messages are exchanged via WhatsApp every day and the app earns about a million new users every day.

Almost two years ago, when Facebook bought Instagram, the billion dollars spent seemed an enormous amount of money. The WhatsApp deal is much more expensive, what’s the point? WhatsApp has a huge user base which is growing and is also very trendy because everything that is social and mobile is now trendy. An important factor to consider is that WhatsApp was becoming a competitor to Facebook, which for the first time in its history is seeing its users leave the social network.

For many young people, the ones who constitute the overwhelming majority of WhatsApp users, it’s become easier to communicate through this application on a mobile device rather than go on Facebook and use its chat. According to a survey, in some countries such as India, Brazil and Mexico WhatsApp is much more popular than Facebook.

There were rumors of an interest for WhatsApp from Facebook but also from Google in 2012. Now the situation had reached such a point that apparently Mark Zuckerberg and his team decided that it was necessary to make the offer that was impossible to refuse.

At least for the time being, WhatsApp should continue to operate independently from Facebook. However, Mark Zuckerberg stated that the application will complement the existing Facebook’s chat and instant messaging services. In short, if young people leave Facebook they’ll eventually go back another way. It’s quite expensive an move but it might be the best one for Zuckerberg.

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