February 20, 2014
Facebook just got a bit more cool.
The social network is shelling out a whopping $19 billion to acquire popular messaging service WhatsApp.
The purchase not only has the potential to add to the social network’s already substantial user base, but to accelerate its advancement in mobile services.
Facebook CEO Mark Zuckerberg told investors during a Wednesday conference call that WhatsApp was worth the multi-billion-dollar pricetag because it’s user growth in the four years since its launch has easily surpassed that of Facebook, Gmail, Twitter and Skype — all of which are extremely popular Internet services or networks. And, although co-founder and chief executive Jan Koum will join the Facebook board of directors, WhatsApp will remain as an independent service, Zuckerberg added.
“WhatsApp is on a path to connect one billion people. The services that reach that milestone are all incredibly valuable,” said Zuckerberg in a press release. “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 acquisition of WhatsApp leaves Koum and co-founder Brian Acton very rich men.
Facebook is paying the pair $4 billion in cash and approximately $12 billion worth of Facebook shares. The deal also included $3 billion in restricted stock units for WhatsApp’s founders and employees. It will vest over four years subsequent to closing.
Koum, in a post on his company’s blog, said the deal will not only give WhatsApp “the flexibility to grow and expand,” but will enable the firm’s 55 employees to “focus on building a communications service that’s as fast, affordable and personal as possible.”
“WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide,” Koum said. “We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.”
Jennifer Cowan is the Managing Editor for SiteProNews.