Facebook buys WhatsApp for $19bn
February 20, 2014
In a deal set to accelerate its drive to bring connectivity and utility to the world, Facebook is to acquire WhatsApp, a rapidly growing cross-platform mobile messaging company, for a total of approximately $19 billion, including $4 billion in cash and approximately $15 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.
WhatsApp has built a leading and rapidly growing real-time mobile messaging service, with:
- Over 450 million people using the service each month;
- 70 per cent 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 acquisition supports Facebook and WhatsApp’s shared mission to bring more connectivity and utility to the world by delivering core Internet services efficiently and affordably. The combination will help accelerate growth and user engagement across both companies.
“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 [WhatsApp co-founder and CEO] Jan [Koum] for a long time and I’m excited to partner with him and his team to make the world more open and connected.”
Koum said WhatsApp’s extremely high user engagement and rapid growth were driven by the simple, powerful and instantaneous messaging capabilities it provided. “We’re excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world.”
Facebook says it fosters an environment where independent-minded entrepreneurs can build companies, set their own direction and focus on growth while also benefiting from Facebook’s expertise, resources and scale. It suggests this approach is working well with Instagram, and WhatsApp will operate in this manner. WhatsApp’s brand will be maintained; its headquarters will remain in Mountain View, CA; Koum will join Facebook’s Board of Directors; and WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications.