Facebook Buys Popular Messaging App WhatsApp for $16 Billion

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Today, Facebook announced the acquisition of WhatsApp for $ 16 billion ($ 4 billion in cash and approximately $ 12 billion worth of Facebook shares.), the largest acquisition of any venture backed company in history.

Facebook stock falls 5% after hours following WhatsApp purchase.

In a statement announcing the deal, Facebook founder Mark Zuckerberg described WhatsApp’s services as “incredibly valuable”.

Jan Koum, WhatsApp co-founder and CEO

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.”

Why WhatsApp is worth $ 16 Billion

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.

Facebook was advised by Allen & Company LLC and Weil, Gotshal & Manges LLP; and WhatsApp was advised by Morgan Stanley and Fenwick & West, LLP.

Facebook will host a 30-minute conference call to discuss the acquisition at 3:00 pm PT / 6:00pm ET today. The dial-in number for the call is (866) 751-3284 (toll free) and (973) 935-8772 (international), conference ID: 2907041. The live webcast of the call can be accessed at the Facebook Investor Relations website at investor.fb.com.

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