In a play to dominate messaging on phones and also the Internet, Facebook has actually gotten WhatsApp for $19 billion. Why Did Facebook Buy Whatsapp: That's a sensational amount for the five-year old company. But WhatsApp has been able to hold its weight against messaging heavyweights like Twitter (TWTR), Google (GOOG) as well as Microsoft's (MSFT) Skype. WhatsApp has upwards of 450 million customers, as well as it is including an added million customers daily.
Why Did Facebook Buy Whatsapp
Referring to WhatsApp's rising growth, Facebook CEO Mark Zuckerberg said on a teleconference, "No one in the background of the globe has actually done anything like that."
WhatsApp is one of the most popular messaging application for mobile phones, according to OnDevice Study.
Purchasing WhatsApp will just boost Facebook's already strong placement in the congested messaging world. Carrier, Facebook's a standalone messaging application for mobile phones, is 2nd only to WhatsApp in its share of the mobile phone market.
Similar to traditional text messaging, WhatsApp allows people to connect through their mobile phone numbers. Yet instead of acquiring texting charges, WhatsApp sends out the actual messages over mobile broadband. That makes WhatsApp especially cost effective for interacting with people overseas.
That kind of mobile messaging services have actually become hugely popular, with twice as lots of messages sent over the mobile Web than using typical messages, according to Deloitte. However the majority of the messaging market's revenue is still driven by text messaging.
On the teleconference, Facebook stated it is not aiming to drive revenue from WhatsApp in the close to term, instead focusing on growth. Zuckerberg claimed he doesn't prepare for trying to boldy grow WhatsApp's profits up until the service gets to "billions" of customers.
WhatsApp currently bills a buck a year after providing consumers their initial year of use totally free. WhatsApp CEO Jan Koum stated on the teleconference that WhatsApp's business version is currently effective.
That indicates Facebook acquired WhatsApp to include worth to its existing messaging solutions, along with for the lasting capacity of the business.
Facebook bought Instagram for $1 billion in 2012 for similar reasons: As young social media network users moved in the direction of photo-sharing, Facebook intended to scoop up what can have eventually become a huge competitor.
Like Instagram, WhatsApp will certainly operate as an independent unit within Facebook, with all the existing workers can be found in as part of the deal.
Facebook (FB) said it will pay WhatsApp $4 billion in cash as well as $12 billion in stock. WhatsApp's founders and personnel will certainly be eligible for for one more $3 billion in stock gives to be paid out if they remain employed by Facebook for four years. Koum will certainly also sign up with Facebook's board of directors.
