News by: Jeff Causey 19th Feb 2014
Facebook announced that an agreement had been reached for the social media giant to acquire WhatsApp, one of the most popular, fastest growing mobile messaging platforms. The deal includes a cash payment of $4B, the issuance of $12B worth of Facebook Class A common stock, and another $3B in restricted stock to be issued to WhatsApp employees. Combined, the new stockholders from WhatsApp will represent almost 8% of Facebook shareholders. Shortly after the announcement, Facebook CEO Mark Zuckerberg and WhatsApp CEO Jan Koum held a conference call to provide additional details and insight into the deal.
Zuckerberg said the acquisition of WhatsApp aligns with Facebook’s own goal of moving to be more mobile oriented and ultimately to connect everyone on the planet. In looking at WhatsApp, Zuckerberg and his team think the platform will reach 1 billion users in the next few years based on their current growth of 1 million new users per day. Zuckerberg also addressed concerns about Facebook Messenger, saying “WhatsApp is more about real-time and we see those as two very different use cases.”
Koum said he is “excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.” During the conference call, questions were raised about advertising appearing in WhatsApp and about whether current rates, only 99 cents per year, might increase. The two CEOs pretty much avoided answering the questions directly other than to say advertising probably was not the best way to monetize WhatsApp and messaging in general.
No timeline was provided for the deal to close, though no regulatory stumbling blocks are anticipated so it should occur before the end of the year. At least for the short term, WhatsApp is expected to continue to operate independently post-acquisition.
news source: talkandroid.com
