Facebook is buying WhatsApp for $16 billion

Facebook is buying WhatsApp for $16 billion

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Facebook has announced this afternoon that it has reached a deal to acquire WhatsApp, the makers of the popular cross-platform messaging app, for a staggering $16 billion. That’s $4 billion in cash and approximately $12 billion in Facebook shares.
The social network says that WhatsApp will continue to operate independently after the acquisition, but claims the deal with WhatsApp—who has nearly 500 million users—”accelerates Facebook’s ability to bring connectivity and utility to the world.”
“Facebook today announced that it has reached a definitive agreement to acquire WhatsApp, a rapidly growing cross-platform mobile messaging company, for a total of approximately $16 billion, including $4 billion in cash and approximately $12 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.
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 Jan for a long time and I’m excited to partner with him and his team to make the world more open and connected.”
The company also provided some WhatsApp growth stats:
  • 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.
Additionally, Facebook says that it will be paying WhatsApp a $1 billion break-up fee if the acquisition some how falls through, and it will be hosting a conference call at 3PM PST today to discuss further details. You can listen in on that call by clicking here.
Admittedly, $16 billion (potentially $19 billion) sounds like a crazy amount for a messaging app—especially compared to the $3 billion that Facebook reportedly offered Snapchat last year. But not many services boast an active user base of half-a-billion.
It’ll be interesting to see what comes of this. If you want to see what WhatsApp is all about, you can find it in the App Store here.