If you assumed paying $1 billion for Instagram was crazy, after that this will certainly blow your freakin' mind: Facebook revealed late Wednesday that it has actually acquired messaging application WhatsApp for $19 billion. Yes, that's billion, with a "b." We'll provide you a moment to pick your jaw off the floor.
Did Facebook Bought Whatsapp
The WhatsApp offer involves some $4 billion in money, as well as another $12 billion well worth of Facebook stock up front-- that equals $16 billion, in case you do not have a calculator in front of you. WhatsApp's founders as well as workers will certainly also obtain one more $3 billion in Facebook shares over the following 4 years, bringing the complete price of the purchase to $19 billion. The deal has been confirmed in documents filed with the U.S. Securities and also Exchange Commission.
Facebook has consented to pay WhatsApp $1 billion in cash as well as to release $1 billion in Facebook stock as a separation fee, if the SEC does not authorize the offer.
A peek at the numbers reveals why Facebook invested billions on a 5-year-old text messaging option. In a news release, Facebook revealed that WhatsApp has some 450 million active month-to-month users, 70 percent of whom utilize the messaging solution daily. At that price, says Facebook, the number of WhatsApp messages comes close to the overall number of SMS text sent throughout the entire globe on an average day.
" WhatsApp gets on a course to connect 1 billion individuals. The solutions that get to that milestone are all exceptionally important," Mark Zuckerberg, Facebook owner as well as Chief Executive Officer, claimed in a statement.
In a post, WhatsApp co-founder and also Chief Executive Officer Jan Koum, who will sign up with Facebook's board of directors, stated that the application "will certainly stay independent as well as operate independently" of Facebook, which "nothing" will certainly change for individuals. Koum additionally stated that the offer "will offer WhatsApp the versatility to grow and also increase," while giving him, co-founder Brian Acton, and the rest of the What' sApp team "even more time to concentrate on developing an interactions solution that's as fast, economical and also personal as feasible."
WhatsApp does not serve ads to individuals. Rather, the application charges a $1 annual fee after a year of totally free solution. Koum says the application will certainly remain ad-free under Facebook's umbrella.
Jim Goetz of Sequoia Capitol, the investment firm that offered WhatsApp with $8 million in funding-- the only funding the company obtained, according to Crunchbase-- looked for to explain the $19 billion amount brought by WhatsApp in an article. He connects the incredible acquisition total up to the app's blowing up active userbase, the company's "legendary" team of just 32 engineers, Koum's and Acton's commitment to "constructing a pure messaging experience," and also the reality that WhatsApp spent specifically $0 on advertising.
" Those much less acquainted with WhatsApp and its wonderful product will certainly admire exactly how a young firm could be so important," created Goetz. "Much of those individuals will be in the UNITED STATE because there's nothing else house expanded modern technology firm that's so widely enjoyed overseas and so under valued in the house. ... Today PayPal and YouTube are both household names around the globe. Tomorrow the same will be true for WhatsApp."
Soon after Facebook introduced the offer, Chief Executive Officer Mark Zuckerberg said in a post on his Facebook Web page that WhatsApp will certainly assist meet his firm's "goal ... to make the world more open as well as linked."
" WhatsApp will match our existing chat and also messaging solutions to offer new devices for our neighborhood," Zuckerberg wrote. "Facebook Messenger is commonly used for talking with your Facebook good friends, as well as WhatsApp for interacting with all of your calls and little teams of people."
Zuckerberg included that the WhatsApp group "had every choice in the world, so I'm thrilled that they chose to collaborate with us." Facebook has purportedly been considering getting WhatsApp since 2012, while Google was said to have actually offered to acquire the company for $1 billion in April of in 2015-- a report that WhatsApp's head of company growth Neeraj Aroratold later on refuted. Not that $1 billion would certainly have sufficed, anyway.
