Mobile Messaging WhatsApp to be Purchased by Facebook
The fast growing mobile messaging WhatsApp will be purchased by Facebook Inc for roughly US$ 19 billion in cash and stock options in what analysts are saying to be a landmark deal that will bring the largest social network closer to the heart of mobile communications and will bring younger users.
The sale will involve US$ 12 billion in stocks, US$ 3 billion in restricted stocks and US$ 4 billion cash that will be distributed over several years. Facebook has rated the WhatsApp deal worth is more than its own IPO and underscored the social network’s plan to grab the messaging market. The mobile messaging app WhatsApp is developed by Ukarainian Jan Koum who dropped out of college along with Brian Acton a Stanford alumnus. The app is said to be a start up fairy tale that has more than 450 million users in five years and adding a million more users every year.
Mark Zuckerberg known for closing a US$ 1 billion deal to purchase Instagram in 2012, proposed the WhatsApp tie up with Koum ten days earlier. The App is a leader among different kinds of smart phone messaging app that are now catching users attention across north America, Euorpe and Asia. Even if Whats App is strictly sticking to its core function of mimicking texting, several other apps such as WeChat and Line are offering e-commerce deals and games along with the messaging features.
Although Zuckerberg and Koum didn’t reveal how the company will make money beyond the one dollar annual fee that is not even charged on the first year, the WhatsApp will continue to operate independently and continue its policy on no advertising.