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Facebook to Acquire WhatsApp for $16 Billion

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Facebook announced this afternoon that it has reached agreement to acquire WhatsApp, the incredibly popular multi-platform mobile messaging service. Oh, you want to know how much the deal is for? How does $16 billion sound? The breakdown makes that $4 billion in cash plus approximately $12 billion worth of Facebook shares.

According to the press release, WhatsApp will continue to operate independently and “retain its brand,” while the move will help to accelerate “Facebook’s ability to bring connectivity and utility to the world.”

For those new to WhatsApp, understand that the messaging platform has over 450 million users each month with 70% active on any given day, which also means they are “approaching the entire global telecom SMS volume.” The numbers are impressive for sure, but are they $16 billion impressive? Facebook certainly thinks so.

And that’s that. We’ll jump on the conference all at 3PM Pacific and update should there be other news.

Facebook to Acquire WhatsApp

February 19, 2014

  • Acquisition accelerates Facebook’s ability to bring connectivity and utility to the world
  • Leading mobile messaging company will continue to operate independently and retain its brand
  • WhatsApp co-founder and CEO Jan Koum to join Facebook Board of Directors

MENLO PARK, CALIF. – February 19, 2014 – Facebook today announced that it has reached a definitive agreement to acquire WhatsApp, a rapidly growing cross-platform mobile messaging company, for a total of approximately $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.

WhatsApp has built a leading and rapidly growing real-time mobile messaging service, with:

  • Over 450 million people using the service each month;
  • 70% of those people active on a given day;
  • Messaging volume approaching the entire global telecom SMS volume; and
  • Continued strong growth, currently adding more than 1 million new registered users per day.

The acquisition supports Facebook and WhatsApp’s shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably. The combination will help accelerate growth and user engagement across both companies.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg, Facebook founder and CEO. “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.”

Jan Koum, WhatsApp co-founder and CEO, 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 honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.”

Facebook fosters an environment where independent-minded entrepreneurs can build companies, set their own direction and focus on growth while also benefiting from Facebook’s expertise, resources and scale. This approach is working well with Instagram, and WhatsApp will operate in this manner. WhatsApp’s brand will be maintained; its headquarters will remain in Mountain View, CA; Jan Koum will join Facebook’s Board of Directors; and WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications.

Upon closing of the deal, all outstanding shares of WhatsApp capital stock and options to purchase WhatsApp capital stock will be cancelled in exchange for $4 billion in cash and 183,865,778 shares of Facebook Class A common stock (worth $12 billion based on the average closing price of the six trading days preceding February 18, 2014 of $65.2650 per share). In addition, upon closing, Facebook will grant 45,966,444 restricted stock units to WhatsApp employees (worth $3 billion based on the average closing price of the six trading days preceding February 18, 2014 of $65.2650 per share). As of February 17, 2014, Facebook had 2,551,654,996 Class A and B shares outstanding plus approximately 139 million dilutive securities primarily consisting of unvested RSUs. The Class A common stock and RSUs issued to WhatsApp shareholders and employees upon closing will represent 7.9% of Facebook shares based on current shares and RSUs outstanding.

In the event of termination of the Merger Agreement under certain circumstances principally related to a failure to obtain required regulatory approvals, the Merger Agreement provides for Facebook to pay WhatsApp a fee of $1 billion in cash and to issue to WhatsApp a number of shares of Facebook’s Class A common stock equal to $1 billion based on the average closing price of the ten trading days preceding such termination date.

Facebook was advised by Allen & Company LLC and Weil, Gotshal & Manges LLP; and WhatsApp was advised by Morgan Stanley and Fenwick & West, LLP.

Webcast and Conference Call Information

Facebook will host a 30-minute conference call to discuss the acquisition at 3:00 pm PT / 6:00pm ET today. The dial-in number for the call is (866) 751-3284 (toll free) and (973) 935-8772 (international), conference ID: 2907041. The live webcast of the call can be accessed at the Facebook Investor Relations website at investor.fb.com. Facebook uses the website http://investor.fb.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at (855) 859-2056 or (404) 537-3406, conference ID 2907041.

About Facebook

Facebook’s mission is to give people the power to share and make the world more open and connected. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.

About WhatsApp

WhatsApp is a personal real-time messaging network allowing millions of people around the world to stay connected with their friends and family.

Via:  Facebook
  • makaveli7bg

    Hemlis is the real thing right now. People should spread the word. I hope developers are going to launch it as soon as possible.

  • rfranken

    there are sooo many apps that do exactly the same thing…..and better! this one just has the most downloads. worth millions sure. but billions. nah

  • chris_johns

    u guys need to realize something…fb is trying to make capital on advertising…”450 million users each month”…put 2 and 2 together and youll see why they did this

  • chris_johns

    I mean thats a lot of clams for whats basically a messaging app…but I see fbs motives here…and i applaud them…take over everything facebook! make me some money i want those shares google status!

  • http://www.chasehammer.com/ Chase Hammer J

    Holy over payment Batman. Thats just nuts. Ive never even heard of WhatsApp.

    • chris_johns

      stop it

  • jrgray27

    I don’t know what’s more discouraging Facebook paying 16 Billion for it or that Forbes reporting that Google offered 10 billion for it…SMH. Hope that investment pays off for you!

  • MKader17

    What’s does WhatsApp offer that Hangouts doesn’t.? I know so many people that you different chat clients and when I mention Hangouts its like they find it confusing.

    With a Google Voice number I get calls on my iPad, and between Hangouts and GrooveIP it was like I never left home while abroad as long as I had a WiFi connection.

    I guess I’m frustrated that these apps get so popular when Hangouts offers messaging from every device (Including any PC/MAC) seemlessly

    • chris_johns

      hangouts blows compared to whatsapp to be honest…u cant even send a flippin video through hangouts(not mms)

  • De Nguyen

    55 employees for $16 billion.
    How much was Moto sold for?

    • flosserelli

      $3 billion for an OEM that was beginning to shake up the hardware scene with truly innovative devices
      versus
      $16 billion for an app that basically does the same thing as dozens of other apps

      Something is definitely off here…

      • chris_johns

        its about exposure buddy….think globally

  • Tony Byatt

    I regret the day I created a Facebook account…

    smh…

    • Chris

      Cry me a river

    • creed

      Then deactivate it. Ironic how many people b!tch about Facebook, yet still have an account. Don’t like it, don’t use it.

  • arthur2142

    Wow, and it was less than a year ago that Google was rumored to be looking at WhatsApp for the bargain basement price of $1 Billion!

    http://www.droid-life.com/2013/04/08/rumor-google-planning-to-acquire-whatsapp-for-upwards-of-1-billion/

    • Chris

      You snooze you loose.

  • abitm1

    Bummer!!

  • Chris

    kids these days love to text each eachother while they are three feet away…. turning in to zombies… same kids who are gonna take care of us when we are old. kill yourselves now before they do to us

  • flosserelli

    I never understood the fascination with WhatsApp. Now that it will likely require a Facebook account means I will never use it again.

    • AbbyZFresh

      Do you live in the U.S.? Do you iMessage? Do you pay for texting?

      WhatsApp is very popular in most of the world because it eliminates the need for SMS.

      • flosserelli

        1. I live in the U.S.
        2. I don’t iMessage because I have an android device. I probably wouldn’t be posting on Droid Life if I had an iphone.
        3. I pay one bill for unlimited talk, text & data. I realize that not everyone has the same plan.
        4. WhatsApp does the same thing that numerous other messaging apps do. It’s not that special.

    • Chris

      Same. Is it What is app? They never explain the “app” they are asking whats for….

      I vlame Jan Koum for that…

      • JMonkeYJ

        I think it’s supposed to be like “What’s up?” in an app –> Whatsapp. ie an app for casual conversation.

  • Kapil

    Idiots they would have gotten for free in app store instead of paying 19billion

  • Kapil

    its 19 billion not 16

  • Cael

    And WhatsApp’s usage is going to plummet in 3…2..1…

    • AbbyZFresh

      Why? Many of WhatsApp users and probably their contacts too probably use FB anyway.

      • Chris

        Most people still use facebook. its mostly the nerds who get a huge erection over google plus

    • Chris

      Why? most of their users dont even know they were just bought out or even give a damn. most are facebook users….

  • grayson360

    Dat PenTile D: I’m gonna guess it’s the Galaxy Nexus?

  • NYCLawyer

    When I read this I thought. Oh. They misplaced the “m” with a “b”. Or maybe someone missed a”.”. Really?

  • Intellectua1

    In other news I dropped What’s App for BBM

  • Intellectua1

    $16 Billion Daaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaamn!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • SA_NYC

    That works out to $35 per user. That is officially insane(ly high).

  • SA_NYC

    Bye-bye whatsapp for me…not getting forced onto FB (or Google+ for that matter), I don’t care what happens. I’ll go back to phoning people, shudder.

    • Chris

      cry me a river

  • preeth manu

    WhatsApp is my go-to communications platform :).

  • Bill Anderson

    I use WhatsApp a lot, but only with my wife. I find it’s voice message features invaluable, and it has been very reliable, unlike the HeyTel and a couple of other voice-only apps. Really like the delivery confirmation check marks. It even does a great job of quickly sharing videos and pictures, so I can send pics of the kids to the wife in real-time when she is on work trips. If this acquisition makes it easier for other friends and family to use it, then I am all for it.

  • Kevin

    i’d really like to see the valuations and the projections that FB used to justify that number.

  • Marc

    Oh noooo! I have just paid my WhatsApp fees for the next five years… Probably have to look into a new IM.

  • Alseddiq

    WhatsApp have almost eliminated the use of SMS and MMS overseas, and what makes it popular is that it uses phone number as ID, so you don’t need to get the email or username of people you wish to contact, which is the case with most other chatting platforms.

    • cizzlen

      I can talk to my brother overseas, easily send him pics and videos without worrying about getting charged. It has been a great tool for me.

  • MJ

    I have read that the younger generation is not using Facebook that much and is instead using apps like Whatsapp. I guess instead of trying to compete, FB decided to just buy them.

    • AbbyZFresh

      I’m the younger generation(just turned 20) and i can tell you most people are still heavy on FB. We just have other additional options to use as side networks besides FB. All that “teens leaving Facebook” is a myth. It’s probably true for the younger teens(13-15ish) leaving the site.

      • MJ

        I don’t really consider 20 the younger generation. I’m talking about kids getting online for the first time. I’m sure most create a FB profile just to have one, but are not using it as much for communicating with their friends. I would think your age group is probably the highest group of FB users since your social life pretty much grew up with it and you are heavily invested in it’s use. I know if I was first getting online and my parents and relatives were all on it, I would not be putting much stuff on there where they would see it and would tell my friends not to.

        • Chris

          I grew up with myspace and facebook. I created my myspace account one year after it went on line (back when pretty much everyone used it)

          that was ten years ago. Now i only have facebook. Text messending apps are fine and all but dont offer the same thing as an actual social network.

          what sucks about todays kids is that they could be three feet from each other and they still text…. They are gonna have ZERO people skills, and these are the people who will take care of us when we are old? might as well die now…

      • Franklin Ramsey

        I hate to break it to you AbbyZFresh, but the younger generation that is leaving Facebook for other apps wouldn’t include you as you are over the age of 16.

      • Person

        Um, you really need to see the latest FB metrics. Basically every available metric for under-25 demos is imploding.

        This is about FB needing to staunch the bleeding, so they go and buy an app that they no doubt were able to determine is where a good portion of their users were going. Facebook acquired a userbase of 300 million, but if 100 million of that are people who have basically abandoned FB, then really all they’ve done is get a net 200 million increase, and forced 100 million back into the ecosystem.

      • Chris

        24 here (in 24 hours) and i still use facebook as well…

      • bmg1001

        I’m 15, California, US, no one knows what WhatsApp is…

        • AbbyZFresh

          You live in the US. Key phrase.

          America has free unlimited texting plans everywhere. You don’t need WhatsApp for that.

          The rest of the world has to pay pretty high fees for texting, thats why WhatsApp is so big.

          • Andrew Choi

            I live in Korea. EVERYONE uses a similar messaging app called KakaoTalk. EVERYONE. and remember there are more active smartphone than people in Korea.

          • Chris

            most people here use it jsut to be cool orm hip

        • Chris
      • minimure77

        hi i’m 12 wat is this

    • Chris

      most kids today are so damn stupid

  • Chippah

    Whatsapp is great and all,But it gets old trying to convince other people to use it like any other non-base install app.
    Just like Samsungs sms app,
    just like hangouts.
    etc etc etc..

    • Chris

      Unless its a cross platform and mobile/desktop program, not everyone will use it.

    • Ryan

      Actually, when you think about it, I think starting from 4.4, Hangouts is installed by default as a system app and alternative to SMS (before it does replace the original SMS app).

      Grant it, its not the full answer to that, but having been using it for a while, its not really all that bad. Though yes, non-base installed apps typically have a harder time, occasionally, to catch on than some others would.

  • Raikou

    What ever happened to that new Interface update that was suppose to come to Facebook for Android?

    • cmbeid

      I signed up for the beta, install every single update (almost daily), but I have never seen the new UI.

    • Dominick White

      Its already up.. I have used it a bit. And seems faster and doesn’t drain battery life,like before. But that could be cause i only check it once or twice a day. Because of a page I am in on there

    • cjohn4043

      Yeah, mine app updated like a week or so ago. It’s pretty nice.

  • Good_Ole_Pinocchio

    That’s A LOT OF MONEY. But What’sApp is definitely the most dominant messaging app there is I think world wide. They may just be worth 16Billion.

  • r.™

    Snapchat lost out…

  • aye_winchell

    hahaha, Your’re drunk Facebook, go home.

  • zachos

    These are some insane valuations… the social media IPO/Merger/Acquisition bubble is inflating out of control.

  • The Narrator

    Lolwat , see, jewish people like spending money

    • BK

      Oh wait, did racism become cool again? I must have missed it.

      • Uncle Ruckus

        That’s what happens when a person lives in their mother’s basement for far too long

  • MistaButters

    $19 billion total….. man, Facebook does not play.

  • Alex Boro

    Haha so WhatsApp is worth 5 times more than motorola. Sad times we live in…

    • AbbyZFresh

      Welcome to the social media version of the Dot Com Bubble of the 2010s.

    • Brandon

      You underestimate its use in Europe. Pretty much no one uses SMS, they all use WhatsApp.

      • mark

        So what you’re saying is that Europeans are smarter than Americans when it comes to messaging.

        Damn Europeans

        • tu3218

          SMS is still beneficial in certain instances. Like that time when you don’t have data signal.

        • Alex Boro

          Most people who have phones already have unlimited text, so why not use it?

        • michael arazan

          Yep, Europeans are a lot smarter too when protecting consumers from Big Business too. Their regulations are a lot better and smarter there to try and prevent the consumers from being screwed by companies.

    • Jérôme Besnard

      You wanna cry more? Remember a couple of weeks ago when Snapshap refused offers from Facebook (and Google I think) for 3/4 billion dollars – more than Motorola. From my perspective, it is pathetic. Google paid 1.1 billion dollars in 2006. That was “reasonable”. Now I feel what we have here is an acquisition bubble going on. Our friend MKBHD reminded us too that NASA yearly budget was less than what Facebook is paying for a 5 year old company of less than 100 employees. Pitiful.

  • AbbyZFresh

    Meh. I don’t see anything wrong. 90% of the world uses Facebook and i’m sure the majority of WhatsApp(a lot of their users are overseas) users also use FB. There will be no problems with this.

    Now if this is Google purchasing WhatsApp. There will be a crapload of angry reactions from the public about this.

    • http://www.ytmnd.com MH

      The overwhelming majority of whatsapp users are outside the US/Canada, facebook is trying to capture more market share by getting people to use Fbook messenger to message internationally.

      Google could just open google voice/chat up internationally and crush whatsapp in a heartbeat.

    • Marc

      I disagree. FB isn’t that big outside the US/Canada, but that’s exactly where WhatsApp is big.
      Not surprised WhatsApp is fairly unknown over here, but the rest of the world loves it. Especially in countries where people are still charged per SMS.

      • AbbyZFresh

        I travel to Europe and Africa at least twice per year and i can tell you most people i see in those places use FB as their prime social network.

        But yes that’s the exact reason why WhatsApp is used so much overseas.

    • Franklin Ramsey

      90% of the world uses Facebook?

      Funny, I thought there were 7 billion people in the world and just under 900 million active Facebook accounts.

      • Pedro

        Math of the younger generation :)

      • Robert Macri

        He means 90% of the people he knows.

    • ObsidianGT

      85% of statistics are made up on the spot. http://uncyclopedia.wikia.com/wiki/Statistics

  • brkshr

    I despise facebook

    • Chris

      No one cares

      • brkshr

  • Alex Boro

    LOL why? WhatsApp and Facebook have one thing in common; no one uses them.

    • El_Big_CHRIS

      i think the use is more overseas than US. whenever i see stuff from latin america, poeple use whatsapp

      • Uncle Ruckus

        whatsapp is indeed very popular with the latinos

        • AbbyZFresh

          Africa too especially. Everyone i know there uses WhatsApp on their Blackberries and Samsung phones.

        • Marc

          Basically popular worldwide, except North America.

    • Good_Ole_Pinocchio

      No One Uses What’s App? As of December they have 400million monthly users. They are probably the most used messaging App World Wide. Even in the caribbean folks are moving away from BBM to What’s App.

    • Ajmobileguru

      Living under a rock Bro? Whatsapp is used everywhere and not for nothing does it have close to 450 million users.

    • Chris

      try again please kid

      • Alex Boro

        Facts are facts.

    • Ryan

      I have heard of WhatsApp, but don’t use it. I’m in the US, and most, if not all, big carriers have unlimited texting plans in some form or fashion. So, like others, being used highly overseas would make sense.

      Now FB on the other hand, is false considering EVERYONE I know (except the rare 4 or so) has an account with that dumb site. It exploded the past few years, and a bit of a shame my sister uses it, but her choice on what she puts on there. I don’t have one myself, and don’t care for it either.

  • ken147

    So 16 Instagrams.

    • El_Big_CHRIS

      lol

  • Michigan Guy

    In addition, upon closing, Facebook will grant 45,966,444 restricted stock units to WhatsApp employees (worth $3 billion based on the average closing price of the six trading days preceding February 18, 2014 of $65.2650 per share)

    Talk about happy day at Whatsapp…

  • Shamu

    I’ve never even touched WhatsApp

    • http://www.droid-life.com Kellex B

      Have to say that I’m with you. :P

      • Charlie R.

        Whats this conference “all” you are jumping on? :-)

        In all seriousness, there should be some interesting stuff to learn from it. Looking forward to it.

        • http://www.scaryuncledevin.com/ Devin Rodriguez

          At first I thought you were confused about the conference call, then I realized you were correcting spelling mistakes. Well played.

      • Good_Ole_Pinocchio

        WHAT? That’s it Kellen we need you to Review What’s App ASAP! It’ll be for your own good!

    • Transverse45h

      I will never ever touch whatsapp. thats for sure

      • Nexoduss

        Especially now haha

    • M3tr1c

      Same here. Always hear about it but never have seen the NEED for it.

      • http://www.ytmnd.com MH

        It is the bitcoin of chat apps

    • T4rd

      I’ve never even touched Facebook.

      • Jim890

        Same here.

        • Riz Virani

          Lucky you guys ._.

          It’s not even useful anymore.. It’s just.. I don’t even know why I use it anymore.

          • Maxim∑

            to stay in contact with 1% of your friends list probably

    • teleclimber

      It was a great messaging service that had one huge advantage: it was not tied to any large company (FB, Google, MS, Apple, whatever) and a revenue model so that you felt like for once in your internet life you could exchange messages without somebody listening to sell you ads.

      No longer now…

      • AbbyZFresh

        Facebook can simply shift the WhatsApp users to FB Messenger or leave them as an independent company.

      • Caz Abbott

        Exactly my thoughts. This is not good.

        I did find this recently… It’s not out yet but I’m waiting for it: https://heml.is

        • Joshua Vaughn

          yes, that looks great.

    • picaso86

      WhatsApp is great to text internationally…just sayin’