Thursday, February 20, 2014



Company to continue to run independently, CEO to take seat on Facebook board of directors

Facebook has announced that it will buy cross-platform messaging service WhatsApp for a total of $16 billion, split between cash and stock. The deal was announced today by Facebook as a definitive agreement, with the messaging service receiving $4 billion in cash and aonther $12 billion in Facebook stock, with the option for another $3 billion in restricted stock units also available to be vested in four years. If for some reason the deal is cancelled due to regulatory issues, Facebook will pay a breakup fee of $2 billion split between cash and stock to Whatsapp.
WhatsApp, which has over 450 million monthly active users, is one of the biggest players in the messaging wars today. Facebook quotes some statistics, stating that WhatsApp is adding one million users to its service every day, with a total message volume on the network approaching that of global SMS traffic.
As was the case with Instagram, WhatsApp will continue to operate as a separate company and keep its branding in tact. Co-founder and CEO Jan Koum will remain at the company, but will also take a seat on the Facebook board of directors. In a post on its company blog, WhatsApp reiterates that nothing will change from a user perspective after the buyout, and the word "partnership" is being regularly thrown around from both companies.

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