Facebook to buy WhatsApp for $19 billion!

February 19, 2014
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We’ve updated the post to reflect that the total cost of the acquisition is $19 billion, when taking into account restricted stock units granted to WhatsApp employees.

Facebook will acquire messaging company WhatsApp for $19 billion, Mark Zuckerberg’s company revealed today in a regulatory filing.

As part of the deal, WhatsApp’s shareholders will receive $4 billion in cash and $12 billion in Facebook stock, while employees and founders of the popular messaging service will receive $3 billion in restricted stock units that will vest over four years. According to Facebook, Whatsapp will continue to operate independently and keep its brand. WhatsApp co-founder and CEO Jan Koum will become a member of Facebook’s board of directors.

In the official announcement, Facebook says that over 450 million people use WhatsApp at least once a month, and of these people, 70 percent use it every day. The number of messages exchanged on the platform is approaching the entire global SMS volume, which is telling for the magnitude of WhatsApp’s reach and influence. And the service doesn’t show any signs of slowing down, with one million users currently joining every day.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg on the deal. Facebook itself can boast the same number of users.

Facebook wants WhatsApp to “set its own direction and focus on growth while also benefiting from Facebook’s expertise, resources and scale”, meaning that the brand will continue to exist more or less unchanged. Facebook Messenger and WhatsApp will co-exist.

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The deal comes just days after another messaging service was acquired – Viber was bought by Rakuten for a comparatively modest $900 million.

If the deal falls through due to a failure to obtain regulatory approval, Facebook will pay WhatsApp a fee of $2 billion in cash and stock. Stay tuned for more.

Read: What is WhatsApp, and how popular is it ? and Google reportedly offered to buy WhatsApp for $10 billion

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