Facebook has announced that it is going to buy WhatsApp, one of the famous messaging services used by smartphones users today. According to the announcement, Facebook is buying the messaging app for about $19 billion – the largest deal Facebook has ever done. Even bigger than the largest deals of other major popular companies like Apple, Google, and Microsoft.
According to Anthony Michael Sabino, business professor in St. John’s University, the deal might make people think and worry that technology companies like Facebook are becoming too aggressive with their aims of providing better new products and services to their users.
However, according to Mark Zuckerberg, CEO of Facebook, they see WhatsApp as a very valuable service and expect the messaging service to reach billions of users in the next years.
WhatsApp has a total of 450 million users today, and 70% of those users access the application every day. The application receives about a million of new users every day as well. Through WhatsApp, 19 billion messages are being sent and 34 billion are received per day. A hundred million video message and as much as 600 million photos are also being shared every day via WhatsApp.
The $19 billion value will be paid through stocks, which will cover about $12 billion of the total cost and cash for another $4 billion. The remaining $3 billion will be given as restricted stock to the founders and employees of the messaging app. The restricted stock will vest after 4 years.
Facebook, the largest social networking company in the world today, definitely prices WhatsApp for its millions of users, which mainly consist of young adults and teenagers.
Facebook became the main hangout for older demographics. Through WhatsApp Facebook is pursuing to reach the younger demographics of users even if it is outside of Facebook.