Facebook Expands Its Reach, Acquires the WhatsApp Messaging App
Article by George Norman
On 20 Feb 2014
WhatsApp, the cross-platform mobile messaging app that currently has more than 450 million monthly active users, will be acquired by Facebook.

Facebook will pay “a total of approximately $16 billion” to acquire WhatsApp. $4 billion will be paid in cash and the remaining $12 billion will be paid in the form of Facebook shares. An additional $3 billion in restricted stock units will be paid to WhatsApp’s founders and employees that will vest over four years.

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WhatsApp is a properly good and very useful messaging app. And when you have an app that is properly good and very useful, people take notice. The app’s popularity has been steadily (and might I add impressively) growing. Here is an example, to better put things in perspective: in just four months, and without spending a dime on promoting itself, the app grew from 100 to 400 million active users. If that isn’t impressive, I don’t know what is.

Know who else took notice of WhatsApp? Mark Zuckerberg, Facebook founder and CEO. Expecting WhatsApp to connect 1 billion people in the near future, Zuckerberg decided to acquire it.

"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg. "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."

Jan Koum, WhatsApp co-founder and CEO, had the following to say:
“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.”

The following amounts will be paid by Facebook to acquire WhatsApp:
  • $4 billion in cash.
  • $12 billion worth of Facebook shares.
  • $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.
Here’s what will happen once the acquisition goes through:
  • WhatsApp and Facebook Messenger will continue to operate as standalone applications.
  • WhatsApp’s brand will be maintained and its HQ will remain in Mountain View.
  • Jan Koum will become a member of Facebook’s Board of Directors.
Fun Fact - turns out that WhatsApp co-founder Brian Acton applied for a job with Facebook in 2009, but was rejected.



In related news, I remind you that last year Facebook acquired Instagram for $1 billion.



Tags: Facebook, WhatsApp, Instagram, acquisition
About the author: George Norman
George is a news editor.
You can follow him on Google+, Facebook or Twitter

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Facebook Expands Its Reach, Acquires the WhatsApp Messaging App
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