Posted on
February 20th, 2014

Facebook announces purchase of WhatsApp

Facebook has decided to bring WhatsApp into the fold

Mark Zuckerberg announced his great excitement at the successful purchase of WhatsApp. “Our mission is to make the world more open and connected. We do this by building services that help people share any type of content with any group of people they want.”

The internet based mobile messaging system allows users to message for free across all of the major mobile platforms. Its reliability has become synonymous with the brand and has accrued 450 million people over the past 5 years and claims to receive 1 million new sign ups per day. It has also been predicted that the numbers will rise to 1 billion over the next couple of years.

This caught Facebook’s directors attention and they moved in to acquire WhatsApp for a total of $19 billion (£11.4 billion). This breaks down into $4 billion (£2.4 billion) in cash, $12 billion (£7.2 billion) in Facebook shares, plus, at a later date, $3 billion (£1.8 billion) as restricted stock for the employees and founders of WhatsApp.

Facebook has a history of acquiring its competition, its largest sale prior to this being Instagram for $1 billion, and has even made a $3 billion bid for Snapchat the photo messaging service.

Staying true to their origins

It might strike as being odd that a company that is so dedicated to providing an advertising free service that they should sell to the largest Social Media Network whose revenue is mostly advertisement driven. Although Zuckerberg ambiguously announces “WhatsApp will continue to operate independently within Facebook. The product roadmap will remain unchanged and the team is going to stay in Mountain View.” We can only hope they will stay true to the original service as Zuckerberg has also indicated that he thinks that advertising isn’t the best way to make money through mobile apps.

It is believed that there is potential to utilise WhatsApp for its international reach (more extensive than Facebook) to connect people together and to help with forinternet.org, which is another Zuckerberg partnership, to make internet services cheaper for everyone.

A partnership blooms

Out of the deal Mr Jan Koum, co-founder of WhatsApp, has become Silicone Valleys newest billionaire as well as director of the board of Facebook. Mr Koum’s objective with WhatsApp has always been to connect the world together and with his new positions, as well as retaining control of WhatsApp, this is more achievable.

It seems safe to say that we will all be watching this acquisition eagerly as the next few months ensue.

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