Facebook buys WhatsApp for $16 billion, suddenly Instagram's $1b acquisition looks like a bargain

By on February 19, 2014, 4:45 PM
facebook, acquisition, im, social, messaging, whatsapp

Facebook has agreed to buy leading instant messaging platform WhatsApp for a whopping $16 billion. The company made the surprise announcement in a blog post just minutes ago, detailing its reasoning for the deal as well as how it plans to go about the purchase. In short, Zuckerberg & co. are shelling out $4 billion in cash and approximately $12 billion worth of Facebook shares to snap up WhatsApp’s technology and user base.

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.

To better explain the deal Facebook highlighted some of WhatsApp’s key metrics: It’s estimated that over 450 million people are using WhatsApp worldwide today of which 70% are active, adding another million users per day and quickly approaching the entire volume of carrier-based SMS worldwide.

"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg, Facebook founder and CEO. "I've known Jan for a long time and I'm excited to partner with him and his team to make the world more open and connected."

The deal is expected to close later this year and there’s a juicy $2 billion payout for WhatsApp’s founders ($1 billion in cash, $1 billion in Class A common stock) should things fall through due to failure of obtaining the required regulatory approvals or otherwise. WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications.




User Comments: 37

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wastedkill said:

What I would do with $16billion.... Is it just me or is facebook buying anything they can with money they will never have?

Guest said:

I think you might want to check your sources again. Other prominent websites are reporting that Facebook is buying WhatsApp for $19 billion, not $16 billion.

Guest said:

A huge number of people just had their privacy eroded even more. Facebook, Google, etc. are destroying privacy as we know it. This is why I'm such a strong advocate of privacy-based web services such as Ravetree, HushMail, DuckDuckGo, etc. You should definitely try out some of these sites if you haven't already. They're actually really good, and you don't have to worry about your personal information being data-mined.

wastedkill said:

A huge number of people just had their privacy eroded even more. Facebook, Google, etc. are destroying privacy as we know it. This is why I'm such a strong advocate of privacy-based web services such as Ravetree, HushMail, DuckDuckGo, etc. You should definitely try out some of these sites if you haven't already. They're actually really good, and you don't have to worry about your personal information being data-mined.

What you mean by the US government? I am pretty sure they have already had their data mined like google and microsoft had without even knowing.

Also this sale of whats app seems like a stupid thing to do I mean even IF you get 1billion active members its gonna take you 16years for it to pay for itself! its beyond stupid to pay that much for something soo small, its like mark just took some pills and went ape over the table and said $19bill $19bill I will buy it for $19bill even tho I know I am just washing money down the drain!

Guest said:

Maybe Marks butt buddy owns it.

Guest said:

Isn't messaging free? Why do people use Whatssapp

wastedkill said:

Isn't messaging free? Why do people use Whatssapp

Whatsapp is $1 per year span that out over 450mill people thats $450mill a year...

1 person liked this | davislane1 davislane1 said:

I'm just going to short the NASDAQ. Forget taking too much heat on rallies, this buying up of small companies for billions of dollars wreaks of 1999-2001. Alas, I suppose that's what you get when you put kids with no business acumen in charge of billion dollar companies.

3 people like this | TS-56336 TS-56336 said:

Why did they pay $16 billion for it? They could've just downloaded it for free.

Guest said:

I'm sure they'll get more than just the $1 per person a year. Knowing Facebook they'll probably sell your information/usage patterns to the highest bidder.

Guest said:

Although the price is cringe worthy, it seems like a smart move for Facebook. More and more teenagers are avoiding Facebook since their parents and grand parents are now on it. WhatsApp is how a lot of people are socializing now. Facebook needs to make strategic moves to stay relevant. They don't want to go the way of MySpace.

davislane1 davislane1 said:

Although the price is cringe worthy, it seems like a smart move for Facebook. More and more teenagers are avoiding Facebook since their parents and grand parents are now on it. WhatsApp is how a lot of people are socializing now. Facebook needs to make strategic moves to stay relevant. They don't want to go the way of MySpace.

People aren't leaving FB because their parents and grandparents are on it. They're leaving for one of two reasons:

1. They realize what a frivolous waste of time it is.

2. The novelty has finally worn off and they need a different social fix.

The exceptions to this rule are tier 1 hipsters, as they are the only group dweebish enough to ditch a service "'cause mommy uses it."

WhatsApp won't save them from their inevitable decline. My generation typically subscribes to the "if it works, make it better" philosophy of life. Consequently, things get broken. That's what Zuck & company did to FB and you can bet they'll do it to this, too.

1 person liked this | m4a4 m4a4 said:

Isn't messaging free? Why do people use Whatssapp

Whatsapp is $1 per year span that out over 450mill people thats $450mill a year...

It says just users, not paid users. I know that it's a free download and, I think, a free year before they ask you to subscribe...

cliffordcooley cliffordcooley, TechSpot Paladin, said:

I know that it's a free download and, I think, a free year before they ask you to subscribe...
At which point you change monikers and get another free year.

1 person liked this | Guest said:

Zuckerberg in PANIC mode:

'Mark, we think this company could take a few percent of our users in the next few years...'

'Throw the BANK at them !"

Guest said:

Sorry... Just walking past and looked in the window.

What's WhatsApp????

If it's an extra cost instant messaging subscription service that is the same as the one included in your Telco subscription service.

And he paid 19 Billion for it!

Hmmm...............(Tucks hands in pocket and keeps walking).

Skidmarksdeluxe Skidmarksdeluxe said:

Why did they pay $16 billion for it? They could've just downloaded it for free.

Yeah then it would only have cost them buck a year thereafter. WhatsApp really saw them coming.

Skidmarksdeluxe Skidmarksdeluxe said:

Next week we can all look forward to an ad cluttered WhatsApp app. I've been using WhatsApp for ~2 years now and they haven't asked me for a cent yet. I wonder how this will change under FB's greedy gaze...

Guest said:

Too much power in one organization should be laws to prevent this

Kibaruk Kibaruk, TechSpot Paladin, said:

Am I the only one that uses facebook to actually comunicate instead of publishing every little nonsense I had for dinner last week??

The thing is, a persons privacy is as private as he means to have it. If you don't want anyone else to see your pics you just don't upload them, if you want to put that pic you had on a meeting with friends it's up to you.

Some users use it for the social-games-apps, some as a journal, some for marketting-commercial use, others like me to just comunicate.

You make facebook what you want it to be. To me this news is great, I hate it being on the computer and receiving a message through whatsapp to get the phone and start messaging back on the limited screen/keyboard, if this means I could reply to my whatsapp contacts through facebook's chat I would love it.

Kibaruk Kibaruk, TechSpot Paladin, said:

Thats really bad news. Facebook just want to cut competition. They should just let this small start ups grow.

You call a 16 billion company a small start up?? Are you freaking kidding me?

They are not cutting competition, they are consolidating as a comunicational company.

Guest said:

"....and also in Fox News, Mark Zuckerberg pays $16 billion for a polished turd. Celebrates by sacrificing a lamb and snorting enough coke to briefly pretend he's not in the 10% most ugly percentile."

"Coming Up...are 90% of Facehook users actually bots? We reveal hArdCoRE eViDuNCe that Facehook has always been a CIA botnet built with assistance from secret members of Israeli Anonymous and administered from the Ecuadorian Embassy by Julian Assange's using his advanced ocular implants!!"

"Then..is Mark Suckerberg an ALIEN? Some people say it's a rumour started by Fox News, but we have more hArdCoRE eViDuNCe to suggest his rampant business stupidity can only have led to riches through the intervention of mYSteRiouS iNTerGaLaCtic faRcEs, and it's not Luke Skywalker we're talking about here! Tonight, we're revealing the Black Hole enigma, an evil force with a gravity so strong it will tear all victims' sense of self to small intangible, yet saleable pieces, while deceptively appearing as the singular glistening apotheosis of all freedom and expression."

mojorisin23 mojorisin23 said:

Whats app is BBM for everyone in the world. when I text friends in italy, in london, everyone uses whats app, not the antiquated SMS system that charges 50 cents a text.

great for sharing pics and stuff. I hate facebook but whats app works perfect. hopefully they dont mess with it or I/m out

Kibaruk Kibaruk, TechSpot Paladin, said:

Mojo if we are lucky we will be able to send messages to whatsapp users from facebook!

mojorisin23 mojorisin23 said:

Mojo if we are lucky we will be able to send messages to whatsapp users from facebook!

you would think... althuogh I dont use facebook so that functionality is useless for me. but if its important to you, I'm all for it. I just dont want to lose functionality is all.

Like skype after MS ruined it...

1 person liked this | Brodo Laggins Brodo Laggins said:

Why did they pay $16 billion for it? They could've just downloaded it for free.

Guest said:

Whatsapp is now going to be ruined. facebook cant even make a stable version of their own facebook app on android. at least its very slow on my phone and loading facebook from opera is much faster on my phone even with off road mode off

North_Dakota North_Dakota said:

WhatsApp has strategic value to Facebook because its growth is a major threat to their core business. It would not have nearly as much value to anyone else. I use Whatsapp. I don't use Facebook. I don't want facebook being shoved in my face through Whatsapp. Should I be concerned? :'(

Guest said:

"..This is why I'm such a strong advocate of privacy-based web services such as Ravetree, HushMail, DuckDuckGo, etc. You should definitely try out some of these sites if you haven't already. They're actually really good, and you don't have to worry about your personal information being data-mined"

..are you joking or what?

Guest said:

Public revenge on Zuckerberg: abandon every service he buys in anticompetitive desperation.

Gods revenge on Zuckerberg: make him so dog ugly that only paid chicks would kiss him. Later in life curse him with unending and incurable diarrhea

cliffordcooley cliffordcooley, TechSpot Paladin, said:

Gods revenge on Zuckerberg: make him so dog ugly that only paid chicks would kiss him. Later in life curse him with unending and incurable diarrhea
Careful what you wish for!

Kibaruk Kibaruk, TechSpot Paladin, said:

Wow... guest posts are so... guests!

Good for facebook! And hopefuly good for whatsapp all I can think about right now is the ability to text whatsapp through a computer using facebook or whatever, that would be great.

To all the fanboys and zuckerberg haters... keep hatting it won't make him any less successful nor any less rich that you go flamming all over forums, in the end all you do is wear yourself down.

Guest said:

I thought that they were buying 450 million new facebook users.

Guest said:

Messaging is "free" in the US, but that's not the case in the rest of the world where messaging charges can be significant. Also the purchase removes one more potential way consumers can communicate outside of Facebook. Facebook is taking out an "insurance" policy. They *may* have overpaid for it.

Kibaruk Kibaruk, TechSpot Paladin, said:

Messaging is "free" in the US, but that's not the case in the rest of the world where messaging charges can be significant. Also the purchase removes one more potential way consumers can communicate outside of Facebook. Facebook is taking out an "insurance" policy. They *may* have overpaid for it.

Look at it differently, it's another way users can communicate through facebook. I know there are people that hate it but almost everyone I know has facebook, that they use or don't use as a wall or to play games or whatever BUT since everyone or almost everyone has a facebook account it's easier to find and organize or communicate via it, sometimes even better than emails or phone calls (When people cant answer the phone because the are at work, or driving, or whatever, they'll see their message though). Imagine the same case but + whatsapp integration (Now I'm just speculating) now you can send a message through your computer via facebook to a phone using whatsapp.

JC713 JC713 said:

Wow, $16 billion. I Was absolutely shocked when I Saw this figure the first time. Didnt expect this at all.

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