Facebook Buys WhatsApp For 19 Times The Price Of Instagram

The social networking giant has just bought messaging app WhatsApp for $19 billion (RM67 billion) in cash and shares - it's BIGGEST acquisition yet.

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Facebook Closes USD19 Billion WhatsApp Deal That's Now Worth USD22 Billion

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Facebook says it has wrapped up its landmark $19 billion acquisition of WhatsApp, a deal that was hashed out in Mark Zuckerberg’s house over the course of a few days in February and sealed over a bottle of Jonnie Walker scotch. WhatsApp has continued to run its operation completely independently since then, but the closing of the deal marks the start of a gradual integration as Facebook gives the world’s biggest mobile messaging service legal and administrative support and — eventually, we can presume — finds new ways to monetize the company it spent more than Iceland’s GDP on.

As part of the deal, WhatsApp co-founder Jan Koum has been appointed to Facebook’s board. Mr. Koum will remain chief executive of WhatsApp, receiving $1 in annual base salary and restricted stock units worth nearly $2 billion. European Union regulators greenlighted the acquisition on Friday, clearing the way for a deal that had been fiercely opposed by Europe’s telecom industry.

Fortunately for those parties, the value of Facebook’s shares are now higher than they were when the deal was announced in February, notes Re/code’s Peter Kafka, making the deal worth around $21.8 billion.

WhatsApp makes money by charging a $1 a year subscription in a handful of countries that have clear carrier billing systems and where credit card penetration is high, bringing in about $20 million in annual revenue, according to Forbes’ estimates. That’s not enough to justify a $19 billion price tag, so Facebook is almost certainly looking at other ways the messaging service could make money.

WhatsApp founders Brian Acton and Jan Koum at their headquarters in Mountain View

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Facebook Bought Messaging App WhatsApp For USD 19 Billion In Cash And Stock

Facebook has bought messaging app WhatsApp in a deal worth a total of $19bn (£11.4bn) in cash and shares.

WhatsApp messaging.

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The deal to buy it includes $4bn in cash and approximately $12 billion worth of Facebook shares, plus an additional $3 billion in stock to WhatsApp's founders and employees at a later date.

It Is The Social Networking Giant's BIGGEST Acquisition To Date


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The acquisition of the hot messaging service with more than 450 million users around the world stunned many Silicon Valley observers with its lofty price tag.

Mark Zuckerberg Said, "WhatsApp Is On A Path To Connect 1 Billion People, The Services That Reach That Milestone Are All Incredibly Valuable"

“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 in a statement.

Mark Zuckerberg's post on Facebook in regards to the acquisition of WhatsApp.

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It makes money by charging users a subscription fee of $1 per year, although it offers a free model as well.

WhatsApp allows users to send messages over internet connections, avoiding text messaging fees. The company claims it is currently registering one million new users a day.

WhatsApp Co-Founder Jan Koum Plans To Operate The Firm "Independently And Autonomously"

On a conference call to discuss the deal, WhatsApp co-founder Jan Koum says he plans to operate the firm "independently and autonomously". He will also become a member of Facebook's board of directors.

WhatsApp's Brian Acton and Jan Koum are billionaires thanks to a $19 billion deal with Facebook.

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"We're excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world," Mr Koum said in a statement.

He Also Elaborated That Nothing Will Change For WhatsApp Users, "You Can Continue To Enjoy The Service For A Nominal Fee"

"You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication."


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"There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product."

While Mark Insisted He Had No Plans To Place Advertising On Whatsapp's Interface

The Facebook founder said he believed WhatsApp was on track to have a billion users, but insisted he had no plans to place advertising on WhatsApp's interface, saying he did not think ads were the best way to make money from messaging systems.

Mark Zuckerberg, photo for illustration purposes only.

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Forbes Says "The Purchase Price Is Insanely High For A Startup With Only 55 Employees"

Forbes article on the acquisition of WhatsApp.

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Prior To This Acquisition, Facebook's Biggest Buy Had Been Instagram For USD1 Billion In 2012

Instagram on mobile.

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It had also reportedly offered $3bn to acquire photo messaging service Snapchat.

In November 2013, Facebook's Dipping Numbers Were Reportedly Due To A Shift Of Interest To Messaging

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