That’s 19 times of what they paid for the popular Image sharing website Instagram. Yes, Facebook bought the very popular chat app WhatsApp for a whooping sum of $19 billion. Of which, $16 billion would be in cash and stock for the company ($12 billion worth of stock and $4 billion cash), while the other $3 billion would be in stock for the employees of WhatsApp. Whether this is a smart purchase or a blunder, would be found only when Mark Zuckerberg and others plan things out for it, but the Facebook CEO did mention that they won’t join the huge social network with this messaging service, and both will run independently.
On his Facebook wall, Mark Zuckerberg said:
I’m excited to announce that we’ve agreed to acquire WhatsApp and that their entire team will be joining us at Facebook.
Our mission is to make the world more open and connected. We do this by building services that help people share any type of content with any group of people they want. WhatsApp will help us do this by continuing to develop a service that people around the world love to use every day.
WhatsApp will continue to operate independently within Facebook. The product roadmap will remain unchanged and the team is going to stay in Mountain View. Over the next few years, we’re going to work hard to help WhatsApp grow and connect the whole world. We also expect that WhatsApp will add to our efforts forInternet.org, our partnership to make basic internet services affordable for everyone.
WhatsApp is being used by over 450 million people, and this database of actively connected people is what Mark would have in mind when purchasing WhatsApp. According to OnDevice Research, WhatsApp is the most popular messaging app for smartphones, and buying WhatsApp would strengthen the position of Facebook which is already in dominance against the other scarce social networks on the web.
Zuckerberg said that initially the team is looking for the growth of the app and not the revenue, and WhatsApp is charging $1 per year for the users, although I’m one of those who always saw the service time extended for a few months before I tried to pay the dollar for using the app.
In 2012, Facebook had acquired Instagram for $1 billion for the same reason – Growth and to keep the young users interested and involved not just in the photo sharing service but the social network Facebook.
What the users shouldn’t be worried about, is the integration or syncing, as WhatsApp is going to run in the same way as it always did, Independently. We will get into further details soon.