Last Wednesday, Facebook announced it will buy messaging app WhatsApp in its biggest acquisition to date. Facebook is purchasing the company for $19 billion, which includes $4 billion in cash, $12 billion in Facebook shares, and $3 billion in stocks to be paid to WhatsApp executives at a later date. This deal is easily Facebook’s largest ever, following its $1 billion purchase of Instagram in 2012.
The rapidly growing mobile messaging company founded in 2009 is among the world’s most downloaded apps. WhatsApp allows people all over the world to connect while avoiding text messaging charges. Users can not only communicate via textual messages, but also send each other unlimited images, video and audio messages.
Facebook has shared the reasoning behind the acquisition on its Newsroom blog page. Ultimately, WhatsApp will accelerate Facebook’s ability to bring connectivity and utility to the world. The post also notes that the company will continue to operate independently and retain its brand. WhatsApp co-founder and CEO Jan Korum will join the Facebook Board of Directors. Facebook also highlights WhatsApp’s more than impressive stats over the past four years. The app records over 450 million people using the service each month and 70% of those people are active on a given day. The app is exponentially growing, currently adding more than one million new users per day.
It is evident that WhatsApp has had significantly more success in its first four years of service compared to other prominent social media outlets.
Mark Zuckerburg, CEO of Facebook is very optimistic about the results that the acquisition will bring. “WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable.”
What’sApp CEO, Jan Korum, also adds his excitement for the deal stating, “We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.”
A major emphasis from Korum to WhatsApp users is that nothing will change for them when using the app. He elaborates on a WhatsApp blog:
Along with maintaining the WhatsApp brand as a standalone company, Zuckerburg also states that he has no plans to place advertising on the app. Korum strongly believes in building a “focused messaging experience”, which includes being ad-free. Astonishingly, WhatsApp has spent exactly $0 on marketing and does not even employ a public relations or marketer. Its growth has come solely from its users.
Even if Facebook does not monetize the product, it is a way for them to get the next billion smartphone consumers into their system.
While Facebook proves to be the most popular messaging system in the United States, it cannot compare to the presence WhatsApp has internationally, especially in Europe. Overall, the buy is most likely an attempt to boost Facebook’s international footprint.
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