Facebook Completes Acquisition of Whatsapp

FACEBOOK COMPLETES ACQUISITION OF WHATSAPP

Facebook and WhatsApp are the largest social networks in the world. WhatsApp is the most popular messaging app across the world, mostly in Europe, Asia and Latin America. WhatsApp: The 55-employee company, was founded by Jan Koum and Brian Acton in 2009, reached 450 million users by February 2014.

WhatsApp doesn’t charge any fees for the text messaging; besides text, the app also transmits photo, video and voice-mail worldwide through customer’s internet data. WhatsApp is free to download and is free for a year. Then, it costs only 99 cents a year.

Facebook completes acquisition of WhatsApp for whopping amount of $19 billion in 2014, which is the largest acquisition ever in history of technology. That was incredible amount Facebook paid to the company with $20 million estimated revenue in 2013. That’s the jackpot for the founders of WhatsApp.

Facebook paid $4 billion in cash, $12 billion in Facebook shares (183 million Facebook shares) and $3 billion in restricted stocks for WhatsApp’s employees, that vest over the period of four years.

Motive behind this deal - “The Competitive Environment”: Facebook analyzed that there was a big drop in their teen users who are engaged to text messaging. Facebook founds that teens and millennials around the world were communicating via text over mobile channels. WhatsApp has had more daily users compare to Facebook in 2014. Figures disclosed that, WhatsApp users everyday uploads 600 million photos, 100 million video and 50 billion messages every day.

Like Facebook, WhatsApp allows users to send photos, texts, videos and voice-mails to individual as well as to group. Hence, “New Facebook”. Facebook launched it’s own messaging app, Facebook Messenger in 2011, but failed to get the height. Now, the question is: why Facebook Messenger failed? The simple answer to this question is: because of WhatsApp’s popularity and it’s increasing growth.  

WhatsApp is the fastest growing company in terms of users. WhatsApp adds nearly little less than 1 million new users per day. If the company’s growth continues, it will reach more than 1 billion users by the end of 2016. After the acquisition of WhatsApp, those users and their time also belongs to Facebook.