In a statement released late on Wednesday, Facebook said it is buying Mountain View, California-based WhatsApp for $4 billion in cash and $12 billion worth of Facebook shares. As part of the acquisition, WhatsApp founders and employees will get another $3 billion in Facebook stock that they can cash in after four years.
WhatsApp will continue to co-exist as an autonomous company, Zuckerberg told investors in a conference call, adding the Facebook messaging service Messenger was not a rival.
Facebook has moved aggressively in recent years to catch up with the global shift towards mobile from desktop computing. It paid $1 billion to acquire Instagram in 2012.
It tried, and failed, to buy Snapchat for $3 billion in 2013.
Both companies refused to give geographical breakdowns of subscribers, but BGR, a tech news service, has reported that WhatsApp had 35 million users in India in January, picking up 5 million in just a month.
This wildly popular app, which is free in the first year, is among many messaging services that enable smartphone users to go around their cellular texting plans that come with costs and caps.
WhatsApp has local rivals in South Korea and Japan. But as Zuckerberg told investors in the conference call, it is a clear leader in “Europe, Latin America and India”.
Zuckerberg and Koum, who is eight years older at 37, have known each other for a while. But, they first talked about the deal nine days ago, on an offer from Zuckerberg.
Facebook says it is keeping WhatsApp as a separate service, just as it did with Instagram, which it bought for about US$715.3 million.
WhatsApp has more than 450 million monthly active users. In comparison, Twitter had 241 million users at the end of 2013.
Facebook chief executive Mark Zuckerberg says WhatsApp is on path to reach a billion users.
“The services that reach that milestone are all incredibly valuable,” Zuckerberg said.
Shares of Facebook slid US$1.12 to US$66.94 in extended trading after the deal was announced.
Read more: Facebook buys WhatsApp for US$19b in cash, stock – Latest – New Straits Times http://www.nst.com.my/latest/facebook-buys-whatsapp-for-us-19b-in-cash-stock-1.488639#ixzz2tpU30YzC