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Facebook Set to Buy WhatsApp for $16 billion

Facebook said on Wednesday that it agreed to buy WhatsApp for at least $16 billion to expand into the fast-growing mobile messaging market. Facebook is paying $4 billion in cash and $12 billion in stock for WhatsApp, a service that has 450 million monthly users and is adding more than 1 million new users a day.

document filed with the SEC today confirms the huge purchase. The company says WhatsApp will continue to operate independently after the acquisition — separate from Facebook Messenger — but claims the deal “accelerates Facebook’s ability to bring connectivity and utility to the world. 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.

[pull_quote_center]WhatsApp is on a path to connect 1 billion people. [/pull_quote_center]

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.

“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.”

[pull_quote_center]WhatsApp co-founder and CEO Jan Koum will join Facebook Board of Directors[/pull_quote_center]

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.”

Accordimg to Jan Koum WhatsApp CEO, WhatsApp will still remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication. There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.

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.

The deal is pending regulatory approval and should it not get across the line Facebook will pay WhatsApp $1B in cash and $1B in shares.

 

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