Wednesday saw Facebook announce its intentions to buy messaging service WhatsApp for $16 billion in cash and Facebook stock. The deal will include $4 billion in cash and $12 billion in Facebook stock. An additional $3 billion in restricted stock will also be given to the WhatsApp staff. The Facebook shares will vest over a four year period following closure of the deal.
WhatsApp is a popular and rapidly growing real-time mobile messaging service, with:
- Over 450 million people using the service each month;
- 70% of those people active on a given day;
- Messaging volume approaching the entire global telecom SMS volume; and
- Continued strong growth, currently adding more than 1 million new registered users per day.
The app, an alternative to default SMS service, is available on multiple platforms, including iOS. Facebook will likely look to integrate the app into its own Facebook Messenger app.
“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.”
Jan Koum, WhatsApp co-founder and CEO, said, “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.”