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Whoever said money can’t buy you WhatsApp? I mean Happiness! Well for Facebook, this is certainly not the case. The social media giant has surpassed the $1 billion Instagram deal in 2012, proving this to be their largest acquisition at $19 billion. Yes, you are reading this correctly, $19 BILLION, bigger than any that Apple or Google have done.
Lets check out how the total value of the deal is broken down:
- $4 billion in cash.
- $12 billion in Facebook shares.
- $3 billion restricted stock for WhatsApp founders and employees.
- WhatsApp founder and Chief Executive Jan Koum to join the Facebook board.
The main aim of the shared mission, according to Facebook, is to “bring more connectivity and utility to the world by delivering core internet services efficiently and affordably”, as well as accelerate growth.
CEO and Founder of the Social Media giant Mark Zuckerberg said “WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable…I’ve known Jan for a long time and I’m excited to partner with him and his team to make the world more open and connected.”
So, what attracted Facebook to WhatsApp initially? They have more than 450 million people using it every month, which in turn has led to a huge volume of messages (I guess this goes unsaid). 70% of these 450 million people, are active daily and, check this out, the number of new registered users a day is increasing by an incredible1 million a day! With this said, coupled with Facebook’s 1.2 billion users, together their partnership will gain great data needed to continue growing against competitors.
In a statement regarding the new deal, Jan Koum said: “WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We’re excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world.” Be rest assured though, Facebook has no intention of changing the brands identity. The WhatsApp brand is to be maintained and will act as a standalone application, in the same way Instagram has kept their identity.
Purchasing companies that pose a potential threat and building relationships with those that will improve their empire, will all contribute to help Facebook preserve its position as the social media giant it has become today. In the Greenhouse, we wonder what if Facebook purchased Marmite, would people love it or hate it? (sorry for the bad joke, couldn’t contain my British sense of humour!).