It’s official. Facebook has announced that it would be buying the famous messaging platform, Whatsapp for a staggering $19bn. This makes it the largest purchase by Facebook ever and will strengthen the company’s foundations in the mobile sector. According to a regulatory filing, the deal is worth $19bn of which $12bn will be offered in Facebook stock, $4bn in cash and the rest $3bn in restricted stock to employees and founders.
Whatsapp is the fastest growing messaging platform in the world and has over 450 million users who are using it every month. Out of these, 70% use the platform every day, which clearly shows the popularity of the app amongst the users.
Facebook’s blog gave further details about the deal and mentioned a few key points about Whatsapp. According to the blog post, Whatsapp adds over a million new users every day and its current messaging volume is nearing the global SMS volume.
With this acquisition Facebook aims to strengthen its hold in the mobile industry. Earlier, the company had failed to convince its investors regarding its strategy for mobile users and this deal might be one of the many steps to improve this particular issue.
With the era of the smartphones, messaging apps have gained popularity among the youth. This has been taking a toll on social networking websites like Facebook who have not been focusing on the mobile platform. There’s lot of potential in this sector and hence, paying as much as $19bn for a messaging service that’s so popular worldwide may not be a bad decision.
Whatsapp is a big hit among the young audience particularly internationally and it is said that the service penetration is countries like Brazil, Germany and Spain is as high as 80%. As a result, the acquisition will give Facebook access to a greater audience, especially internationally helping it grow its mobile business.
The deal is beneficial for both the companies, with Facebook getting the wide user base and Whatsapp getting richer.
“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.”
Along with the founders, Jan Kuom and Brian Acton, the employees too are getting richer with this deal. According to sources, the company employs only around 60 employees which means that each individual will get a hefty sum.
While Kuom states that the messaging service will see no changes, he will join the Facebook board to advice on the future of the company.
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