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Facebook to buy mobile messaging app WhatsApp for $16 billion Facebook to buy mobile messaging app WhatsApp for $16 billion
(about 1 hour later)
Facebook announced Wednesday it was buying the mobile instant-messaging company WhatsApp for about $16 billion in a move that would expand the social network’s global reach. Facebook announced Wednesday that it is buying the mobile instant-messaging company WhatsApp for about $16 billion in a move that would expand the social network’s global reach.
WhatsApp’s mobile messaging service, which allows users to trade texts, pictures and videos over their smartphones, is extremely popular in countries such as Brazil, India, South Africa and Indonesia — places where Facebook is trying to expand its reach. It has more than 450 million monthly users. WhatsApp’s mobile messaging service, which allows users to trade texts, pictures and videos over their smartphones, is extremely popular in countries including Brazil, India, South Africa and Indonesia — places where Facebook is trying to broaden its footprint.
Facebook is the most popular social network in the world, but it’s trying to play catch-up in the world of mobile messaging apps, where users increasingly trade messages, photos and videos between their smartphones. More than 450 million people use the app every month.
Facebook has its own messaging service that is popular in the United States called Facebook Messenger, but it lags behind companies like WhatsApp in other countries, where there is intense competition between firms with names that aren’t familiar to many Americans. In China, for instance, the messaging app WeChat is by far the most popular. In Japan, there’s an app called Line. Facebook is the most popular social network in the world, but it’s trying to play catch up in the world of mobile messaging apps, where users increasingly use their smartphones to exchange messages, photos and videos.
At their most basic, these mobile messaging services function like a free text-messaging service on your phone. Like on Facebook, users can set up profiles. Facebook has its own messaging service — Facebook Messenger, which is popular in the United States, but it lags behind companies like WhatsApp in other countries, where there is intense competition between firms with names that aren’t familiar to many Americans.
Much of Facebook’s strategy hinges on growing internationally. Last year, the company reached a landmark by seeing more revenues come from outside the United States than inside. Domestic revenues from marketers and developers comprised 46 percent of the company’s revenues in 2012, compared to 51 percent the year before. In China, for instance, the messaging app WeChat is by far the most popular. In Japan, there’s an app called Line.
“The change is due to a faster growth rate of international users and to the expansion of international sales offices and payment methods,” said the company in its 2012 annual filing. These mobile messaging services function like a free text-messaging service over the phone. As on Facebook, users can set up profiles.
Most of the company’s international revenue came from Western Europe, Canada, Australia and Brazil. By acquiring WhatsApp, Facebook automatically gains a stronger foothold in Africa and Asia, places where the number of mobile users continues to expand rapidly. Much of Facebook’s strategy hinges on growing internationally. Last year, the company reached a landmark by seeing more revenue come from outside the United States than inside. Domestic revenue from marketers and developers accounted for 46 percent of the company’s revenue in 2012, compared with 51 percent the year before.
“WhatsApp is on a path to connect 1 billion people,” said Mark Zuckerberg, Facebook’s founder and chief executive, in a statement Wednesday. “The services that reach that milestone are all incredibly valuable.” “The change is due to a faster growth rate of international users and to the expansion of international sales offices and payment methods,” the company said in its 2012 annual filing.
Facebook agreed to pay $4 billion in cash and $12 billion in Facebook shares for WhatsApp, which is based in Mountain View, Ca. WhatsApp employees and founders will receive an additional $3 billion in restricted stock. The acquisition is the biggest to date for Facebook, which also bought the photo sharing app Instagram in 2012 for $1 billion. Most of the company’s international revenue came from Western Europe, Canada, Australia and Brazil.
By acquiring WhatsApp, Facebook automatically gains a stronger foothold in Africa and Asia, where the number of mobile users continues to expand rapidly.
“WhatsApp is on a path to connect 1 billion people,” Mark Zuckerberg, Facebook’s founder and chief executive, said in a statement Wednesday. “The services that reach that milestone are all incredibly valuable.”
Facebook agreed to pay $4 billion in cash and $12 billion in Facebook shares for WhatsApp, which is based in Mountain View, Ca.
WhatsApp employees and founders will receive an additional $3 billion in restricted stock. The acquisition is the biggest to date for Facebook, which bought the photo-sharing app Instagram in 2012 for $1 billion.
During a conference call with analysts Wednesday, Zuckerberg said Facebook plans to allow WhatsApp to operate independently, much as it has allowed Instagram to function largely as its own product.
As part of the deal, Jan Koum, the founder and chief executive of WhatsApp, will join Facebook’s board of directors.As part of the deal, Jan Koum, the founder and chief executive of WhatsApp, will join Facebook’s board of directors.
“WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide,” said Koum. “We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.” “WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide,” Koum said. “We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.”