Facebook Whatsapp $19 billion Deal
Social media giant Facebook has successfully bought cross-platform mobile messaging app for $19 Billion. That’s a stunning sum for the five-year old company.It is Facebook’s largest purchase deal to date. That indicates Social Media Giants bought WhatsApp to add value to its existing messaging services, as well as for the long-term potential of the company.
The transaction involves $4 billion in cash, $12 billion in stock and $3 billion in restricted stock that vests over several years.
Facebook, of course, has their own popular IM app, Facebook Messenger. Just like they had their own photos platform before they bought Instagram. Like Instagram, WhatsApp will remain its own app, and be run independently from Facebook. That will either maintain options or fragment resources.
The social media giant also said WhatsApp co-founder and CEO Jan Koum would join Facebook’s board. Referring to WhatsApp’s soaring growth, Facebook CEO Mark Zuckerberg said on a conference call, “No one in the history of the world has done anything like that.”
“Almost five years ago we started WhatsApp with a simple mission: building a cool product used globally by everybody. Nothing else mattered to us.
Today we are announcing a partnership with Facebook that will allow us to continue on that simple mission. Doing this will give WhatsApp the flexibility to grow and expand, while giving me, Brian, and the rest of our team more time to focus on building a communications service that’s as fast, affordable and personal as possible.”
Facebook bought Instagram for $1 billion in 2012 for similar reasons. As young social network users gravitated towards photo-sharing, they wanted to replace what could have eventually become a big rival.
The problem with trying to buy your potential replacements in the market is that it’s infinitely expensive. There’s always the next maybe-big-thing coming. Will WhatsApp end up really being worth $16 billion to Facebook, especially in a volatile market that includes other major players like Line, WeChat, BBM, and many more?