Facebook has entered into an agreement to buy the popular cross-platform chat app WhatsApp for an insane $16 billion in cash and stock, it has been revealed.
The deal was agreed between Facebook’s Mark Zuckerberg and WhatsApp founder and CEO Jan Koum earlier this month and was revealed last night. The social media giant’s new acquisition becomes one of the biggest in history, which is impressive given that WhatsApp started life as a tiny startup.
“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable” said Zuckerberg in a press release confirming the deal. He also excitedly wrote on his personal Facebook page, “WhatsApp will complement our existing chat and messaging services to provide new tools for our community.”
So why has Facebook paid so much for a single app? Well, you may not know it but WhatsApp caters for almost as many messages as the global SMS network these days – There are over 450 million people who use the app, with at least 70% of them using it every single day. The app’s growth has been exponential with the smartphone boom, moving from 100m users to 400m in just two years.
Then there’s the question of what Facebook could do with WhatsApp. Jan Koum insists that WhatsApp itself will remain the same and has responded to claims that Facebook ads will creep into the app by saying that the focus is going to be on growing the user base even further.
Facebook could of course borrow from WhatsApp in order to improve its own chat and Messenger service, though Zuckerberg has already said that the two will be kept separate as they have different purposes – he believes Facebook chat is not ‘real time’ and that people use it to send messages asynchronously, whereas WhatsApp is instant.
So that’s Instagram and WhatsApp in the bag for Facebook, amongst many other buys – what’s next? Our money is on Tumblr.