Facebook to buy WhatsApp for $19 billionStaff writer ▼ |
The WhatsApp deal is worth more than Facebook raised in its own IPO. Founded by Jan Koum and Brian Acton, WhatsApp is a Silicon Valley company with 450 million users collected in five years and adding another million daily. Facebook is paying $42 per user with the deal.
"No one in the history of the world has ever done something like this," Facebook Chief Executive Mark Zuckerberg said on a conference call on Wednesday. He revealed that he proposed the tie-up over dinner with Mr. Koum, WhatsApp's CEO, just 10 days earlier, on February 9.
WhatsApp was the leader among a wave of smartphone-based messaging apps that are now sweeping across North America, Asia and Europe. Although WhatsApp has adhered strictly to its core functionality of mimicking texting, other apps, such as Line in Japan or Tencent Holdings Ltd's WeChat, offer games or even e-commerce on top of their popular messaging features.
The deal provides Facebook entree to new users, including teens who eschew the mainstream social networks but prefer WhatsApp and rivals, which have exploded in size as private messaging takes off.
Zuckerberg and Koum on the conference call did not say how the company would make money beyond a $1 annual fee, which is not charged for the first year. "The right strategy is to continue to focus on growth and product," Mr. Zuckerberg said.
Zuckerberg and Koum said that WhatsApp will continue to operate independently, and promised to continue its policy of no advertising. ■