Facebook buys WhatsApp for 19 billion $

[redy.]

http://money.cnn.com/2014/02/19/technology/social/facebook-whatsapp/

 

In a play to dominate messaging on phones and the Web, Facebook has acquired WhatsApp for $19 billion.

That's a stunning sum for the five-year old company. But WhatsApp has been able to hold its weight against messaging heavyweights like Twitter (TWTR), Google (GOOG, Fortune 500) and Microsoft's (MSFT, Fortune 500) Skype. WhatsApp has upwards of 450 million users, and it is adding an additional million users every day.

 

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."

WhatsApp is the most popular messaging app for smartphones, according to OnDevice Research.

Buying WhatsApp will only bolster Facebook's already strong position in the crowded messaging world. Messenger, Facebook's a standalone messaging app for mobile devices, is second only to WhatsApp in its share of the smartphone market.

Related: 5 key moments that changed Facebook

Similar to traditional text messaging, WhatsApp allows people to connect via their cellphone numbers. But instead of racking up texting fees, WhatsApp sends the actual messages over mobile broadband. That makes WhatsApp particularly cost effective for communicating with people overseas.

That kind of mobile messaging services have become wildly popular, with twice as many messages sent over the mobile Internet than via traditional texts, according to Deloitte. But most of the messaging industry's revenue is still driven by text messaging.

On the conference call, Facebook said it is not looking to drive revenue from WhatsApp in the near term, instead focusing on growth. Zuckerberg said he doesn't anticipate trying to aggressively grow WhatsApp's revenue until the service reaches "billions" of users.

WhatsApp currently charges a dollar a year after giving customers their first year of use for free. WhatsApp CEO Jan Koum said on the conference call that WhatsApp's business model is already successful.

That indicates Facebook bought WhatsApp to add value to its existing messaging services, as well as for the long-term potential of the company.

Facebook bought Instagram for $1 billion in 2012 for similar reasons: As young social network users gravitated towards photo-sharing, Facebook wanted to scoop up what could have eventually become a big rival.

Like Instagram, WhatsApp will function as an autonomous unit within Facebook, with all the existing employees coming in as part of the deal.

Facebook (FB, Fortune 500) said it will pay WhatsApp $4 billion in cash and $12 billion in stock. WhatsApp's founders and staff will be eligible for for another $3 billion in stock grants to be paid out if they remain employed by Facebook for four years. Koum will also join Facebook's board of directors.

 

redy.

[Danny]

And in the future, Whatsapp will be more expensive or full with advertising ... -.-

[Tragic]

Did not know this, thanks for the info!

[LazyHippo]

Thats another step for FB in reaching all time communication platforms..

[TulsaGeoff]

I work for a multibillion dollar energy company that is worth about a 1/4 to 1/2 of what this app sold for. It absolutely boggles my mind that this app could sell for so much when we have some much infrastructure and tangible assets. I remember when facebook declined yahoo's 1 billion dollar offering. Snap chat will be the next that facebook buys. They've already declined a 3 billion dollar offer. I bet around 10 they sell.

[Tragic]

I work for a multibillion dollar energy company that is worth about a 1/4 to 1/2 of what this app sold for. It absolutely boggles my mind that this app could sell for so much when we have some much infrastructure and tangible assets. I remember when facebook declined yahoo's 1 billion dollar offering. Snap chat will be the next that facebook buys. They've already declined a 3 billion dollar offer. I bet around 10 they sell.

I also had the same feeling that SC will be added to FB. 

[TulsaGeoff]

Crazy...

 

http://blogs.wsj.com/digits/2014/03/05/google-exec-questions-whatsapp-price-tag/?mod=yahoo_hs

 

Google Exec on WhatsApp Deal: $500 Million Per Employee?!

 

GoogleGOOG +0.10% was flirting with WhatsApp before FacebookFB -0.38%swooped in and bought the text-messaging service for $19 billion last month. Wednesday, a top Google executive suggested Facebook overpaid.

At the Morgan StanleyMS +0.34%technology conference in San Francisco, analyst Scott Devitt asked Google Chief Business Officer Nikesh Arora how Google might generate revenue from its Android mobile operating system other than through advertising and sharing revenue from apps.

Arora asked Devitt for suggestions. The analyst mentioned mobile messaging apps, which are especially popular in Asia.

Arora was skeptical. “$500 million per employee? Is that a good use of our money?†Arora said. “Are you recommending we buy some Asian messaging service?â€

WhatsApp has 55 employees, meaning Facebook’s acquisition works out to $345 million per employee. A Facebook spokesman declined to comment.

Google reached out to buy WhatsApp several years ago, according to two people familiar with the situation, while two other people said deal talks between the two companies also took place more recently.

On Wednesday, Arora said Google is focusing on improving the Android user experience, rather than worrying about new ways to make money from the operating system.

The company’s mobile app store, called Google Play, mobile search ads, YouTube and Google’s own apps will provide more opportunities to make money from Android, Arora added.

[obuz09]

I had boykottet whatsapp and facebook, I had moved to Telegram, and in future I will move to Therma. I was really shoked when I heard the news. I do not feel safe with facebook. I'm scared to get my data. This is the reason why I changed.