Facebook Buys Popular Messaging Service WhatsApp In $19 Billion Deal

whatappregIn an end-of-the workday surprise, Facebook just announced that it bought messaging service WhatsApp in a $19 billion deal. Yes, $19 billion. For those of you WhatsApp users already freaking out that you’ll be forced to use Facebook messenger, shhh, now. It sounds like everything could be just fine.

At first, of course, because major acquisitions like this have a habit of starting out one way and evolving into something entirely different later (Facebook-owned Instagram now has ads, after all). Facebook has always wanted people to use its messenger service so maybe this is its way of getting closer to that goal, in some way not yet known. Mysteries!

Anyway, in the announcement on Facebook’s news page, the company says WhatsApp will “continue to operate independently and retain its brand.” A brand can still be retained but change at the same time, however.

CEO Jan Koum is on his way to the Facebook Board of Directors as a result of the deal, which is made of $4 billion in cash and about $12 billion in stock, plus an additional $3 billion Facebook is setting aside in restricted stocks, that will be divvied up among WhatsApp’s founders and employees and vested over four years. So it’s effectively worth $19 billion.

Then the press release goes on to tout WhatsApp big numbers — 450 million monthly users, 70% of which are active daily — and says that the acquisition is all about bringing “core Internet services efficiently and affordably” to the masses.

“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.”

They then exchanged best friends bracelets and WhatsApp’s 55 employees collectively flipped out that they’re all now super, super rich.

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  1. robinm says:

    Well, that sucks.

  2. Raekwon says:

    I don’t get how this is 16 billion dollars. Kay buys Zales, a rival jewelry company for 690 million and Jos A Banks buys Eddie Bauer, a clothing company, for 825 million but a startup app and messaging service is somehow worth 16 billion? That’s 1/3 the cost of Comcast buying out Time Warner, a massive communications corporation.