Facebook on Wednesday announced the purchase of mobile messaging application WhatsApp for $19 billion in cash and stock, a staggering amount for a tech company acquisition that reflects the social network’s ambition to expand its mobile device advertising revenue.
The purchase dwarfs Google’s recent $3.2 billion acquisition of Nest Labs, a developer of WiFi-connected thermostats and smoke detectors, and it surpasses the $3 billion buyout offer Facebook CEO Mark Zuckerberg reportedly made to mobile messaging application Snapchat. The WhatsApp purchase includes Facebook selling approximately $12 billion worth of its share for the buyout, followed by $4 billion in cash payments. Once the deal closes, Facebook will grant an additional $3 billion in stock purchases to WhatsApp employees, for an overall $19 billion acquisition by the social network.
WhatsApp Messenger is a cross-platform messaging application that allows text, video and photo messaging without having to pay SMS phone texting fees. WhatsApp is available on Android, iPhone, BlackBerry, Windows Phone and Nokia. More than 450 million people use the service every month, and the company adds more than 1 million new registered users each day, Facebook and WhatsApp said in a joint press release.
"WhatsApp is on a path to connect 1 billion people,” Zuckerberg said. “The services that reach that milestone are all incredibly valuable."
Former Yahoo engineers Jan Koum and Brian Acton founded WhatsApp in 2009. Koum is the CEO of the messaging service.
“WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide,” Koum said. “We're excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.”