Facebook on Wednesday announced that it has reached a ultimate agreement to acquire WhatsApp, the popular cross-platform mobile messaging company, for a total of just about $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.
If you look at the way Whatsapp is gaining popularity, the numbers do make a lot of sense. And 16 billion comes as no surprise either. According to reports, the messaging platform has over 450 million people using the service each month and they are growing. More prominently WhatsApp continues to grow at a strong pace, with nearly 1 million new registered users everyday.
According to a slide presentation by Facebook, WhatsApp also sees over 600 million photos uploaded per day, and over 200 million voice messages shared everyday. The chart also shows that WhatsApp growth rate has eclipsed that of Facebook, Twitter, Skype and Gmail.
Zuckerberg said that WhatsApp — a cross-platform mobile app which allows users to exchange messages without having to pay telecom charges — was worth the steep price because its blistering growth around the globe has it on a clear path to hit a billion users and beyond.
“Services with a billion people using them are all incredibly valuable,” Zuckerberg said while discussing the purchase price during a conference call with analysts.
The deal came from a chat Zuckerberg had with WhatsApp co-founder Jan Koum, whom he described as a “valuable thought partner” and friend of many years.
“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 said. “He thought about it over the course of the week, came back and said he was interested.”
For Facebook, the answer to the next level of growth lies in Messaging. The company has tried to promote the Facebook Messenger app aggressively in developing countries. For instance in India, South Africa, etc Android users can download the app and start using it by just giving their mobile number and name. They don’t necessarily have to open a Facebook account. But despite the push, Facebook Messenger hasn’t really been accepted by the lot and Whatsapp continues to be their favorite. When you consider all these factors, it is no surprise that Facebook bought Whatsapp at that price and at this time as well.