Facebook Acquires WhatsApp


February 24, 2014

Social networking giant, Facebook has acquired WhatsApp, a leading cross platform messaging company. The deal value of acquisition is pegged at $16 billion and payment would be made $4 billion in cash and $12 billion in shares of Facebook. Another $3 billion in RSUs will be granted to WhatsApp founders and their employees. The deal also includes $2 billion (One billion in cash and rest in shares) in case it gets shelved due to failure in obtaining necessary regulatory approvals.

As Facebook and WhatsApp work on the same principal of connecting individuals, it is suggested that the partnership would mutually benefit both parties. The remarkable success of WhatsApp of being the maximum used messenger service across the world is believed to increase the reach of Facebook in the longer run. As for Facebook’s benefit to WhatsApp, the former’s resources and history of being the most successful social networking site, will lead to the expansion of WhatsApp across the world. In the meanwhile, WhatsApp will continue to charge $1 after the initial free period of one year as it is currently doing.

It is estimated that the messaging volume on WhatsApp is almost equal to that of the combined telecom text messages across the globe. The messaging application adds to its count a whooping 1 million new members every day. Current statistics as per Facebook’s Blog are that over 450 million users use WhatsApp every month and out of those 70% are active daily.

WhatsApp, with its lean team of 32 engineers processes more than 50 Billion messages every day. To begin with, WhatsApp founders’ strategy was to provide ads-free messenger service that is fast, reliable and cheap. There are many messenger services but, WhatsApp supersedes them with advanced technology that facilitates deliverance of messages at lightning speed.

Though not on the cards yet, with WhatsApp in Facebook’s going for a merger, we can expect to see even better integration of messaging services with the social networking platform.

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