Facebook is paying a whopping $19 billion in cash and stock to buy mobile messaging company WhatsApp.
The deal includes $4 billion in cash and $12 billion in Facebook stock. In addition, WhatsApp’s founders and employees will also receive $3 billion in restricted stock units. WhatsApp co-founder and CEO Jan Koum will also join Facebook’s board of directors.
Facebook announced the mega-deal, easily the social network’s biggest acquisition ever, more than an hour after the close of trading on Wall Street.
“WhatsApp is on a path to connect 1 billion people,” Facebook CEO Mark Zuckerberg said in a statement. “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.”
Facebook is swallowing up one of its main competitors for the attention of mobile device users.
Mountain View’s WhatsApp has more than 450 million people who use the service each month, and 70 percent of them are active on any given day, according to a Facebook news release. WhatsApp is adding about 1 million registered users per day.
“WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide,” Koum said in a press release. “We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.”
Facebook tried to buy ephemeral messaging app maker Snapchat for $3 billion late last year, but Snapchat spurned the offer.
It’s immediately unclear how Facebook plans to integrate WhatsApp into the social network. For now, Facebook said its own Messenger app and WhatsApp will remain stand-alone applications.
The same arrangement has worked for what is now Facebook’s second biggest company acquisition, the photo sharing app Instagram.
It’s also not immediately clear if WhatsApp’s no-advertising policy will change because of its sale to a company that relies on ads for revenue.
“These days companies know literally everything about you, your friends, your interests, and they use it all to sell ads,” Koum said in a blog post. “Remember, when advertising is involved you the user are the product.”
WhatsApp will cash in even if the deal doesn't go through. Facebook has agreed to pay WhatsApp $1 billion in cash and $1 billion worth of stock if the merger agreement falls through before it is completed sometime later this year.
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