Facebook Buys WhatsApp For Whopping $19 billion
Within a week of Japanese internet giant, Ratuken’s acquisition of Viber – a cool messaging app for $900 million, Facebook has announced its acquisition of WhatsApp for a whopping $19 billion. This is undoubtedly a headline making acquisition by Facebook after 1 billion dollar deal for Instagram. Well, you may wonder about the price tag but for Facebook it may well be worth every penny.
The social networking giant will be paying a whopping $19billion for the popular cross-platform messaging client in cash and stock. The new deal calls for Facebook to pay $4billion in cash along with $12 billion in Facebook stock and $3billion in restricted shares for employee retention.
With over 450 million people, using WhatsApp each month and 70% of them being active almost every day, WhatsApp boasts of having one of the highest active user base in the world. The popular messaging service lets users of various devices such as iPhone, BBRY, Android to send text and photographs flawlessly without paying fees.
So, Why is Facebook shelling out such big dollars and what is it getting in return?
Addressing a conference call, Facebook CEO, Mark Zuckerberg said that “WhatsApp like Instagram will be working as an independent entity with its own brand. He also opined that WhatsApp was worth the investment because its user growth has over-powered the leading internet services and networks including Gmail, Facebook, Twitter & Skype. This acquisition is sure to help Facebook gain greater revenue through mobile, where Advertising now makes up the major share of its revenue. What’s more is that with the acquisition, Facebook would be able to fortify its foothold in China, where Instagram and WhatsApps are only allowed to operate and not Facebook.
Sources revealed that in terms of Cost Per user, WhatsApps’s 450 million active users are being bought by
Facebook for a modest $42 each. Let’s cast a glance at the strength of WhatsApp:
– Over 450 million people use WhatsApp every month
– 70% of active users every day
– Messaging volume to conquer the entire telecom SMS volume
– Continued growth adding more than 1 million new users every day.