Facebook Is Buying WhatsApp For $19 Billion [Updated]

Facebook Is Buying WhatsApp For $19 Billion [Updated]

Holy. Crap. We always knew Facebook wanted to get serious in the messaging space, and if you can’t beat ’em, join em: Facebook just bought WhatsApp for an insane $US19 billion. Updated with Mark Zuckerberg’s Facebook post and investor notes.

According to the Securities and Exchange Commission filing, Facebook will buy WhatsApp and turn it into a wholly-owned subsidiary for the low, low price (sarcasm font) of $US4 billion in cash and $US12 billion in Class A Facebook shares.

The deal is subject to regulatory approval and standard closing conditions.

It’s also being reported that An extra $US3 billion will go to the founders, meaning that $US19 billion is the final value.

The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.

Facebook is dropping all of its cyberbucks on the messaging platform for the same reason it acquired Instagram and for the reason it probably tried to buy Snapchat: it knows its users are leaving to these new platforms, so why not buy those platforms and make them part of your ecosystem? It’s a smart move considering how much cash on hand the company has, and the WhatsApp acquisition isn’t going to be the last time Facebook buys something it sees users leaving to.

WhatsApp is a messaging app which connects people around the world over data networks rather than traditional cell networks, and its simple interface and $0 price tag on the App Store means that it recently surpassed 400 million daily active users: the cream of the crop when it comes to engagement. No wonder they were bought out.

Update: Zuck has taken to his Timeline to announce the decision:

I’m excited to announce that we’ve agreed to acquire WhatsApp and that their entire team will be joining us at Facebook.

Our mission is to make the world more open and connected. We do this by building services that help people share any type of content with any group of people they want. WhatsApp will help us do this by continuing to develop a service that people around the world love to use every day.

WhatsApp is a simple, fast and reliable mobile messaging service that is used by over 450 million people on every major mobile platform. More than 1 million people sign up for WhatsApp every day and it is on its way to connecting one billion people. More and more people rely on WhatsApp to communicate with all of their contacts every day.

WhatsApp will continue to operate independently within Facebook. The product roadmap will remain unchanged and the team is going to stay in Mountain View. Over the next few years, we’re going to work hard to help WhatsApp grow and connect the whole world. We also expect that WhatsApp will add to our efforts forInternet.org, our partnership to make basic internet services affordable for everyone.

WhatsApp will complement our existing chat and messaging services to provide new tools for our community. Facebook Messenger is widely used for chatting with your Facebook friends, and WhatsApp for communicating with all of your contacts and small groups of people. Since WhatsApp and Messenger serve such different and important uses, we will continue investing in both and making them each great products for everyone.

WhatsApp had every option in the world, so I’m thrilled that they chose to work with us. I’m looking forward to what Facebook and WhatsApp can do together, and to developing great new mobile services that give people even more options for connecting.

I’ve also known Jan for a long time, and I know that we both share the vision of making the world more open and connected. I’m particularly happy that Jan has agreed to join the Facebook board and partner with me to shape Facebook’s future as well as WhatsApp’s.

Jan and the WhatsApp team have done some amazing work to connect almost half a billion people. I can’t wait for them to join Facebook and help us connect the rest of the world.

Facebook has also posted a note to its Investor Center, and here’s WhatsApp’s blog post.