Facebook buys WhatsApp messaging app for £11.4bn
Facebook has put a deal together to buy popular messaging app WhatsApp for £11.4 billion ($19 billion). The deal will consist of cash and shares and is Facebook’s biggest acquisition to date.
WhatsApp allows users to send and receive text messages through an internet connection and is popular with those who want to avoid text message charges. The app has more than 450 million users worldwide. The app makes money by charging a subscription fee of $1 per year, although it does have a free service as well.
Facebook founder Mark Zuckerberg decribed the latest acquisition as ‘incredibly valuable’ to the brand as a whole.
The deal includes £2.4 billion ($4 billion) in cash and £7.2 billion ($12 billion) in Facebook shares, there will also be an additional £1.8 billion ($3 billion) worth of stock to WhatsApp’s founders and employees later down the line.
WhatsApp co-founder Jan Koum talked about the deal saying, “We’re excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world.” Mr Koum will also become a member of the board of directors for Facebook.
Mr Zuckerberg said that he believed that the app was on track to attract a billion users, reiterating that he had no plans to place advertising on the WhatsApp interface.
After news of the deal broke, Facebook’s share dropped by 5% before recovering slightly. This latest acquisition is the biggest purchase in Facebook’s history, prior to this it was the purchase of Instagram for $1 billion in 2012.
Rumours are surfacing that Facebook has also offered approximately $3 billion to acquire the photo messaging app Snapchat.