Did Facebook Buy Whatsapp

If you thought paying $1 billion for Instagram was insane, then this will certainly blow your freakin' mind: Facebook revealed late Wednesday that it has obtained messaging application WhatsApp for $19 billion. Yes, that's billion, with a "b." We'll offer you a minute to select your jaw off the flooring.

Did Facebook Buy Whatsapp

Facebook Buys Whatsapp

The WhatsApp deal involves some $4 billion in cash money, and another $12 billion well worth of Facebook stock up front-- that equals $16 billion, in case you do not have a calculator in front of you. WhatsApp's owners and staff members will likewise obtain another $3 billion in Facebook shares over the next 4 years, bringing the complete expense of the purchase to $19 billion. The bargain has actually been validated in files submitted with the U.S. Securities as well as Exchange Compensation.

Facebook has consented to pay WhatsApp $1 billion in cash as well as to provide $1 billion in Facebook stock as a separation fee, if the SEC does not approve the deal.

A glance at the numbers shows why Facebook spent billions on a 5-year-old message messaging option. In a news release, Facebook disclosed that WhatsApp has some 450 million active regular monthly users, 70 percent of whom use the messaging service daily. At that rate, claims Facebook, the number of WhatsApp messages approaches the overall number of SMS text sent throughout the entire globe on an average day.

" WhatsApp gets on a course to connect 1 billion people. The solutions that get to that landmark are all unbelievably beneficial," Mark Zuckerberg, Facebook founder as well as CEO, said in a statement.

In a blog post, WhatsApp founder and Chief Executive Officer Jan Koum, that will sign up with Facebook's board of directors, stated that the application "will continue to be self-governing and operate separately" of Facebook, and that "absolutely nothing" will change for individuals. Koum additionally claimed that the bargain "will offer WhatsApp the flexibility to grow and also expand," while giving him, co-founder Brian Acton, and the rest of the What' sApp team "more time to concentrate on building a communications solution that's as fast, budget friendly and also individual as possible."

WhatsApp does not serve advertisements to individuals. Instead, the app charges a $1 annual cost after a year of free service. Koum claims the app will remain ad-free under Facebook's umbrella.

Jim Goetz of Sequoia Capitol, the investment firm that provided WhatsApp with $8 million in funding-- the only funding the company obtained, according to Crunchbase-- sought to describe the $19 billion sum brought by WhatsApp in an article. He associates the incredible purchase total up to the app's blowing up energetic userbase, the firm's "fabulous" team of just 32 designers, Koum's as well as Acton's dedication to "developing a pure messaging experience," as well as the fact that WhatsApp spent specifically $0 on advertising and marketing.

" Those less aware of WhatsApp as well as its terrific item will marvel at exactly how a young company could be so useful," composed Goetz. "Most of those individuals will certainly remain in the UNITED STATE because there's no other home grown technology business that's so extensively liked overseas and so under appreciated at home. ... Today PayPal as well as YouTube are both household names around the globe. Tomorrow the same will certainly hold true for WhatsApp."

Shortly after Facebook announced the offer, Chief Executive Officer Mark Zuckerberg claimed in a post on his Facebook Page that WhatsApp will aid accomplish his company's "objective ... to make the world a lot more open as well as connected."

" WhatsApp will complement our existing chat and messaging solutions to give new devices for our area," Zuckerberg wrote. "Facebook Carrier is commonly made use of for talking with your Facebook buddies, and WhatsApp for communicating with all of your calls and also little teams of people."

Zuckerberg added that the WhatsApp team "had every choice on the planet, so I'm thrilled that they chose to collaborate with us." Facebook has allegedly been checking out acquiring WhatsApp because 2012, while Google was claimed to have provided to buy the firm for $1 billion in April of last year-- a rumor that WhatsApp's head of organisation advancement Neeraj Aroratold later on refuted. Not that $1 billion would have been enough, anyway.