Facebook on Wednesday announced that it is acquiring the popular messaging service provider WhatsApp. The social giant will be a paying 4 billion in cash and 12 billion in stock. In addition, Facebook will also be offering $3 billion in restricted stock units to WhatsApp founders and employees, who will remain with Facebook over four years following the closing.
Given WhatsApp rise and its member base of over 450 million, this was waiting to happen. One or the other Internet giants was expected to snap WhatsApp, it was only a matter of time and Facebook has come out as a winner.
“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable. 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,” said Mark Zuckerberg, Facebook founder and CEO.
Here are some key facts about WhatsApp
- Over 450 million people using WhatsApp every month
- 70% of those people active on a given day
- Messaging volume approaching the entire global telecom SMS volume
- Adding more than 1 million new registered users per day
According to WhatsApp, it will remain autonomous at Facebook and continue to operate as usual. There is no change in pricing or subscription of the service, nor will it change its business model (at least for the near future).
“WhatsApp will remain autonomous and operate independently. 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. 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,” noted Jan Koum, WhatsApp co-founder and CEO in a blog post.
It is important to note here that the acquisition is subject to regulatory approvals and more. In case the deal falls apart, Facebook will pay WhatsApp a fee of $1 billion in cash and will issue WhatsApp a number of shares of Facebook’s Class A common stock equal to $1 billion based on the average closing price of the ten trading days preceding such termination date.
More facts about Facebook & WhatsApp deal
- The Information is reporting that Google had offering WhatsApp to pay in exchange for the right to be notified if the messaging app entered into acquisition talks with other companies and WhatsApp declined.
- Sequoia Capital, which is the lone venture-capital investor in WhatsApp, owns a stake worth as much as $3 billion. A huge win for the VC firm and probably its biggest payday till date.
- WhatsApp is the fifth most downloaded app on Android devices and it is available on almost all mobile platforms.