Facebook has completed its acquisition of the mobile messaging service WhatsApp for almost $22 billion, up from the original $19 billion when the cash-and-stock deal was struck early this year thanks in part to the rising price of Facebook shares.
Facebook named WhatsApp co-founder and CEO Jan Koum to its board Monday. WhatsApp is by far the largest acquisition for the Menlo Park, California company, and bigger than any deals made by Google, Microsoft or Apple.
The price that Facebook was willing to pay raised eyebrows when the buyout was announced Feb. 19, though analysts agreed that landing the popular site made sense. Including cash, stock and restricted stock awarded to WhatsApp employees, the deal is worth $21.8 billion based on Facebook’s stock price on Monday.
WhatsApp has been growing rapidly, especially in developing countries like Brazil, India, Mexico and Russia, and now has more than 500 million users.
WhatsApp lets users chat with their phone contacts, both one-on-one and in groups. It also allows people to send texts, photos, videos and voice recordings over the Internet and lets them text or call people overseas without heavy charges. Free to use for the first year and costing $1 per year after that, the service has no advertising.
Facebook, which has its own mobile messaging app called Messenger, plans to keep WhatsApp as a separate service.
The acquisition was approved by antitrust authority of the European Union on Friday.
Facebook’s shares climbed 32 cents to $77.76 in afternoon trading on Monday.
(AP)
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3 Responses
Can anyone explain where the money is in whatsapp and why would it be worth so much money?
Well they charge $1 a year (after the first year-you would have to change your phone number if you didn’t want to pay the charge-very unlikely)
So at the moment as is, with 500 million users, they will be making $500 million a year! (with only 70 employees-so minus even $100 million for massive salaries and costs, its still profit of $400 a year)
Now imagine it goes up to 6-700million users………get your accountant to figure that sum out for you!!!!
Additionally, by having access to your information, whatsapp will be reading your every thought! By being programmed to pick up phrases and words, it will figure out your age, gender, interests, passions, hobbies, where you live, where you go, what stores you shop in, what type of friends you have, where they shop, your income, anniversaries, basically everything about your life. Now ask an advertising company how much that is worth. The answer will be, ‘unlimited’
Goyish