Social media giant Facebook will acquire mobile
messaging company WhatsApp for 19 billion dollars in a cash and stock deal, the
largest acquisition by the Mark Zuckerberg-led firm so far that will give it a
stronghold in the market for messaging.
The whopping acquisition price includes USD 4
billion in cash, about USD 12 billion worth of Facebook shares and USD 3
billion in restricted stock units to be granted to WhatsApp's founders and
employees that will vest over four years following the closing of the deal.
Under the agreement, WhatsApp co-founder and CEO
Jan Koum will join Facebook Board of Directors. Facebook said the acquisition
will not impact the WhatsApp's brand, which will be maintained and the
company's headquarters will remain in California's Mountain View.
WhatsApp's core messaging product and Facebook's
existing messenger app will continue to operate as standalone applications.
"WhatsApp is on a path to connect one billion people. The services that
reach that milestone are all incredibly valuable," Zuckerberg said.
"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." WhatsApp, which will continue to operate independently, has
built a leading and rapidly growing real-time mobile messaging service with
over 450 million people using the service each month.
Of this number, 70 per cent users are active on a
given day. The messaging volume of WhatsApp is approaching the entire global
telecom SMS volume and the company is currently adding more than one million
new registered users per day.
"WhatsApp's extremely high user engagement
and rapid growth are driven by the simple, powerful and instantaneous messaging
capabilities we provide. We're excited and honored to partner with Mark and
Facebook as we continue to bring our product to more people around the
world," Koum added.
Koum co-founded WhatsApp in 2009 with Brian Acton,
both former Yahoo executives. WhatsApp had received about USD 10 million in
funding two years after it was founded. Facebook's most recent acquisition
attempt failed when Zuckerberg tried to acquire SnapChat last year for a
reported three billion dollars but SnapChat turned down the offer.
In a blog post, Koum said he would not have agreed
to the partnership with Facebook if WhatsApp would have had to
"compromise" on the core principles of the company.
The deal would give WhatsApp the flexibility to
grow and expand and noted that users of the service will not experience any
change in usage.
