February 19, 2014 – Facebook announced that it was to acquire the fastest-growing messaging giant WhatsApp for $16 billion. The deal is reportedly the company’s biggest acquisition in its 10 years’ history, with many critics calling it to be ‘taken-in-a-hurry’ and exorbitant.
However, through the press release, Facebook expressed its confidence in the Messenger and stated that it had more than 450 million Mobile Application Users among which more than 70 percent were active users each day. Moreover, it also claimed that it was adding over a million new users everyday. Mark Zuckerberg, the founder and CEO of Facebook, revealed that ‘WhatsApp’ was to become fastest-growing app and connect 1 billion people across the world.
More interestingly the messaging volume of WhatsApp has been reported to be more than the SMS volume of the worldwide telecom industry. WhatsApp co-founder and CEO Jan Koum has been reported to join Facebook’s board and continue to operate the California-based messaging company independently of its parent.
WhatsApp co-founder and CEO Jan Koum says, “WhatsApp’s simple yet powerful and instant messaging capabilities is the primary reason of high user engagement and the speedy growth. We’re extremely thrilled to work with Mark and Facebook and we will continue to bring our product to maximum people around the world.”
WhatsApp investor Sequoia says that the Company has only 32 engineers who process 50 billion messages everyday across seven platforms.
“Upon closing of the deal, all outstanding shares of WhatsApp capital stock and options to purchase WhatsApp capital stock will be cancelled in exchange for $4 billion in cash and 183,865,778 shares of Facebook Class A common stock (worth $12 billion based on the average closing price of the six trading days preceding February 18, 2014 of $65.2650 per share). In addition, upon closing, Facebook will grant 45,966,444 restricted stock units to WhatsApp employees (worth $3 billion based on the average closing price of the six trading days preceding February 18, 2014 of $65.2650 per share). As of February 17, 2014, Facebook had 2,551,654,996 Class A and B shares outstanding plus approximately 139 million dilutive securities primarily consisting of unvested RSUs. The Class A common stock and RSUs issued to WhatsApp shareholders and employees upon closing will represent 7.9% of Facebook shares based on current shares and RSUs outstanding.” Source Facebook Press Release
WhatsApp Messenger, a cross-platform instantaneous text, audio and video messaging service for smartphones, was founded in 2009 by former Yahoo! employees – a Ukrainian Jan Koum, who is also the CEO, and American Brian Acton. The company is based in Mountain View, California. By the end of 2013, WhatsApp handled approximately ten billion messages everyday with over 450 million active users.
Photo Courtesy: youthcrash