Deals

Facebook acquires messaging behemoth WhatsApp for more than $16B

Whatsapp
Image Credit: giaomeng/Flickr

Facebook today announced in a press release that it intends to acquire titanic messaging service WhatsApp for more than $16 billion.

That price consists of $4 billion in cash and approximately $12 billion worth of Facebook shares, in addition to $3 billion in vested shares for WhatsApp employees.

Facebook is clearly positioning itself strategically against Google’s Hangouts and Apple’s iMessage — and gaining access to WhatsApp’s 450 million users, most of whom are outside the U.S..

Related: WhatsApp is Facebook’s ticket to its next billion users

For comparison, the gross domestic product of Iceland is just $12.3 billion.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Facebook chief Mark Zuckerberg in the release. “I’ve known [WhatsApp cofounder] Jan [Koum] for a long time, and I’m excited to partner with him and his team to make the world more open and connected.”

WhatsApp’s massive userbase largely exists outside of the U.S., which makes this deal Facebook’s ticket to speedier international expansion. As for WhatsApp, the messaging service has yet to truly catch on in the U.S. Facebook can change that.

This deal also grants WhatsApp’s team $3 billion in stock that will vest over the course of four years.

With this announcement, Facebook also shared noteworthy stats that reveal WhatsApp’s current size. Currently, 450 million people use WhatsApp per month, with 1 million users added daily.

As in its Instagram acquisition, Facebook claims that “WhatsApp’s brand will be maintained” and “its headquarters will remain in Mountain View, Calif.”

More information:

Facebook is the world’s largest social network, with over 1.15 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 we... read more »

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