Facebook is about to become an even bigger social media platform with its recent $19 billion purchase of the instant messaging app Whatsapp.
Facebook made the announcement Wed Feb. 19th and will foot the bill with $4 billion cash and $12 billion in stocks. The final $3 billion will be paid out in restricted stock to Whatsapp’s current 55 employees over the next four years. The total cost is roughly nine per cent of Facebook’s total market value.
This deal will give Facebook more control over the world of instant messaging. Whatsapp currently has 450 million users world-wide and is gaining a million more each day.
Co-founder and CEO Mark Zuckerberg published on his own personal Facebook that the deal will complement the messaging tools that Facebook already provides, as well as provide new means of communication within the Facebook community.
He also explains that the purposes of Whatsapp and Facebook messenger are not the same and because of this he will keep the two as separate entities and continue to invest and develop both.
Facebook currently operates on a more content based structure, but it has been trying to elaborate its communication platforms for some time. This deal will allow for Facebook to break into a new market of social media.
In addition to the pricey bill, Whatsapp co-founder and CEO Jan Koum has now been added to Facebook’s board.
Mark Zukerberg finished his personal post saying, “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.”
