Facebook buys WatchApp

Facebook acquired WhatsApp for $19 billion!!! 

This is the biggest deal for Facebook ever. The previous Biggest deal for Facebook was Instagram, which it bought for about $1 billion in 2012. In addition to that Viber’s was acquired by Japanese company Rakuten for $900 million and of course Skype was acquired by Microsoft for $8.5 billion.

Lets see what was the deal exactly:

Facebook will acquire WhatsApp for approximately $16 billion, consisting of $4 billion in cash plus 184 million shares or approximately $12 billion worth of WhatsApp’s stock. Also, Facebook will grant 46 million RSUs worth approximately $3 billion to WhatsApp employees that will vest over four years subsequent to closing. The stock and RSUs to be issued will represent 7.9% of Facebook’s shares based on current shares and RSUs outstanding. The transaction is subject to regulatory approvals, and Facebook expects the deal to close later in 2014. Note that if the deal doesn’t go through, Facebook will still be required to pay $2 billion to WhatsApp under a termination clause.

What does this mean for the average user?

According to WhatsApp CEO Jan Koum nothing.

“It was important for us to build a product not cluttered by gimmicks or promotions and be part of mission to build something to connect people. It is because of those values today we have 465 million monthly active users. Almost one third of a billion people use our product today to stay in touch. We promise not to change and to continue to build what is important to us – using the philosophy of using a product to help people connect,” 

What is next for WhatsApp

According to Jan over the next months (until June) the app will add voice calls feature. The announcement was made in the MWC 2014. That is quite a big change so all the big players in www have now a telecommunication company on their portfolio

• Google - Hangouts
• Facebook - WhatsApp
• Microsoft - Skype