Why Facebook buys it’s another competitor WhatsApp for $19bn !!

by / Friday, 21 February 2014 / Published in Latest posts, Mobile - Smartphone, Tech

Here is some interesting news for  IT world as  Facebook in order to dominate messaging on phone and Web has made a deal to buy WhatsApp,  world`s most popular messaging application for smartphones  for $19 billion.

Facebook stand on the second place on standalone messaging app for mobile devices. Buying WhatsApp

WhatsApp already has 450 million users with more than a million users registering everyday. It is quite cost effective tool for communicating to people especially living abroad. According to Deloitte, more than twice of an amount of messages are been sent on mobile internet than through traditional texts. Currently WhatsApp gives free one year trial version to its users then charge them with a dollar for each year.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg, Facebook founder and CEO. “I’ve known Jan [Koum founder and CEO] for a long time and I’m excited to partner with him and his team to make the world more open and connected.”

Koum 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.”

WhatsApp will “continue to operate independently and retain its brand” despite the acquisition, Facebook said.

This deal is a mix of cash and stock as WhatsApp will be receiving $12bn on Facebook shares $4bn in cash while the remaining $3bn will be for employee’s retention.

Moreover, Jan Kaum, WhatsApp co-founder and CEO will join Facebook`s board of directors.

Facebook has made this move to thwart off its competitors once again as it also bought Instagram for $1bn. Also it would add value to its existing messaging services.

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Why Facebook buys Whatsapp for $19billion