Feeds

Facebook gobbles WhatsApp for SIXTEEN BILLION DOLLARS

Oh snap! Chat app chaps slap $3bn in their slacks. Crack open the schnapps

Security for virtualized datacentres

Facebook has announced that it will acquire mobile messaging service WhatsApp in a deal valued at $16bn.

The merger was revealed in a filing with the US Securities and Exchange Commission published on Wednesday. According to the paperwork, WhatsApp will become a wholly owned subsidiary of Facebook in exchange for $4bn in cash, with the remainder of the sale price provided in the form of Facebook stock.

The sale represents Facebook's largest acquisition to date, and also one of the biggest deals in the social media space so far. Zuck & Co spent less than $1bn to acquire Instagram in 2012.

By way of comparison, Microsoft acquired Nokia's entire mobile phone division in 2013 for just $7.5bn.

In addition to the sale price, Facebook has agreed to hand over the equivalent of another $3bn in Facebook stock directly to WhatsApp's founders and employees – of which there were around 50 as of the end of 2013. These bonus shares will vest over a period of four years.

The move is a strategic one for Facebook. WhatsApp is one of the largest of the "over the top" mobile messaging services, which allow smartphone users to send each other text messages without incurring SMS fees. In a December 2013 blog post, the Mountain View–based startup claimed to have over 400 million monthly active users.

Facebook offers its own, similar service in the form of Facebook Messenger, which links users to the social network's broader online offering, but it hasn't been as popular as competitors like WhatsApp and BlackBerry Messenger. By adding WhatsApp's considerable user base to the mix, the social network scores a considerable coup.

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

In a blog post, Koum said that WhatsApp users shouldn't worry that the service will change as a result of the merger.

"WhatsApp will remain autonomous and operate independently," Koum wrote. "You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you're using. And you can still count on absolutely no ads interrupting your communication."

The merger must pass the usual regulatory hurdles before closing. If it fails to do so by August 19, 2014, the deal is off and Facebook must pay WhatsApp a fee of $1bn in cash and $1bn in Facebook stock.

Following the announcement of the merger, Facebook shares were trending down slightly in after hours trading. ®

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple's iPhone 6 first-day sales are MEANINGLESS, mutters analyst
Big weekend queues only represent fruity firm's supply
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Bill Gates, drugs and the internet: Top 10 Larry Ellison quotes
'I certainly never expected to become rich ... this is surreal'
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.