Facebook Purchases WhatsApp for Lofty Price ($19 Billion)

After the mobile messaging app known as Snapchat rejected Facebook’s $3 million purchase offer, the social network has since moved on to pursue another mobile messaging endeavor. Facebook has recently purchased WhatsApp, a popular instant messaging app, for a sum of $19 billion dollars. This amount includes $3 billion in restricted stock, $12 billion in stocks upfront, and $4 billion in cash.

facebook buys whatsapp

What Is WhatsApp?

WhatsApp is a well established messaging app that has gained a following of approximately 450 million users each month. WhatsApp has been around for five years now, offering cell phone users an alternative over using traditional text messaging that uses expensive data. Instead, WhatsApp uses the Internet WiFi or a cellular network to send messages, saving users both money and data in the process.

Why Did Facebook Want To Acquire WhatsApp?

Facebook CEO Mark Zuckerberg says that Facebook has a mission to help make the world more open and connected. The social network is interested in building and offering services that allow users to share several types of content with those they wish to share it with. WhatsApp was a logical choice for purchase because of its popularity, with over 1 million people signing up every day.

How Will WhatsApp Work After Being Purchased By Facebook?

The social media network plans for WhatsApp to operate independently within Facebook , just as they have kept Instagram, the photo sharing app, separate after purchasing it in 2012 for $1 billion. Facebook has also said that WhatsApp will not be merged with their own popular Facebook Messenger app.

Up to this point, the efforts that Facebook has put into messaging have not been as successful as desired. Their release of Poke at the end of 2012, as well as Instagram Direct that allows users to share private photos, were not as popular as anticipated.

How Does WhatsApp Operate?

In the past, WhatsApp has operated as a free download that operates with no ads that charges users a fee of 99 cents after one year of use. This messaging app has been a big hit with those of the younger generation who enjoy sending texts and pictures to friends and family who live abroad, without being charged ridiculously high international data fees. In the ten years that Facebook has been in operation, their motto has been that the service is”free and always will be”, so it is unclear how they will deal with the idea of a subscription fee after acquiring WhatsApp. WhatsApp CEO Jan Koum has stated in a blog post that nothing will change with the way it operates for their customers.

This acquisition of WhatsApp will allow Facebook to appeal to teenagers who enjoy using messaging apps such as Line and WeChat , as well as become a big part of the mobile messaging scene. It will be a welcome addition that compliments their already existing chat and messaging services that users enjoy. Although the acquisition of WhatsApp shocked those in Silicon Valley because of the expensive price tag, apparently Facebook feels that it was a worthwhile purchase that will ensure their position in the world of mobile messaging.

[Image via vr-zone.com]

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    • Peter Lee

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