Facebook Buying WhatsApp for a Whopping $19 Billion? Details of Deal Revealed
Facebook is planning to buy Whatsapp for a whopping $19 billion, it was revealed on Feb. 19.
The social media giant will make the aquisition in cash and stock. The purchase will be made with $4 billion in cash, $12 billion in Facebook shares, and $3 billion in restricted stock units. The shares and stock units will vest over a period of four years for the founders and employees of WhatsApp.
The news has come as a massive surprise to not only the public but also professionals in the Silicon Valley, particularly because of the shockingly huge amount. The immensely popular messaging start-up has more than 450 million users around the world. Facebook co-founder Mark Zuckerberg said that WhatsApp was ading a million users per day on his FB page on Feb. 19.
In a recent conference call with analysts, Zuckerberg spoke about the deal with "valuable thought partner" and his friend, WhatsApp co-founder Jan Koum.
"Services with a billion people using them are all incredibly valuable," he said.
"Last Sunday evening, about 11 days ago, I proposed if we joined together that would help us really connect the rest of the world," Zuckerberg added about joining forces with Koum. "He thought about it over the course of the week, came back and said he was interested."
Koum, who will be joining Facebook after the deal, spoke about the value of his start-up messaging system.
"WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide," he said.
Koum said that teaming up with Facebook would give WhatsApp "the flexibility to grow and expand."
Jeremy Liew, who is a partner at Lightspeen and an investor in Snapchat, shared his opinion on the deal on his Facebook page.
"People are calling them 'Facebook Nevers,'" he said. "WhatsApp will complement our existing chat and messaging services to provide new tools for our community. Since WhatsApp and (Facebook) Messenger serve such different and important users, we will continue investing in both."
