There is no doubt that messaging apps are very valuable nowadays. Rakuten recently bought Viber for $900 Million but that amount is nothing compared to what Facebook is paying for acquiring WhatsApp. The social networking company is buying WhatsApp for a whopping $19 Billion. This makes it the most expensive tech acquisition, and the fact that what is being acquired is an app makes it harder to grasp. Facebook bought Instagram for $1 Billion and many of us thought that was big money. This one is much bigger.
Facebook is purchasing WhatsApp for $16 billion in cash and stock where $12 billion in Facebook shares is involved along with $4 billion in cash and an additional $3 billion in RSUs for employee retention. Facebook will not really change WhatsApp, noting that it continue to operate independently. WhatsApp’s co-founder and CEO Jan Koum will even be part of Facebook’s board.
The reason for the acquisition is simple. WhatsApp is considered the most dominant messaging app with over 450 million monthly active users. The app has a very strong presence internationally and this is what Facebook is after. Facebook has a standalone Messenger app but it looks like Mark Zuckerberg is tired of playing catch-up.