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VENTURES AFRICA – Social media giant Facebook has announced the acquisition of mobile messaging service WhatsApp for $16 billion, making its biggest ever acquisition.
“I’m excited to announce that we’ve agreed to acquire WhatsApp and that their entire team will be joining us at Facebook,” said Facebook founder, Mark Zuckerberg in a statement on Wednesday.
The purchase is aimed at bolstering Facebook’s presence, especially among several mobile subscribers who see WhatsApp as a way of avoiding text messaging charges. The mobile messaging service WhatsApp has more than 450 million monthly active users, dwarfing Twitter’s 241 million.
Facebook announced the acquisition after the close of the market on Wednesday, with the founder describing WhatsApp’s services as “incredibly valuable”.
Facebook explained that the $19 billion acquisition will come in a mix of $12 billion in Facebook’s stock and $4 billion in cash. Also, the app’s founders and employees will be granted $3 billion in stock restricted for four years after the deal closes.
WhatsApp, which claims it registers one million new users daily, makes money by charging users $0.99 per year. It also offers a free model which is then charged after the first year.
Facebook intends to let WhatsApp continue running independently, the same way it did with Instagram. WhatsApp co-founder and chief executive Jan Koum will however become a member of Facebook’s board of directors.
“We’re excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world,” Mr Koum said in a statement.
Mr Koum and Brian Acton, who co-founded WhatsApp are set to become Silicon Valley’s newest billionaires once the deal is finalised.
600 million photos are uploaded daily on the mobile messaging platform. 200 million voice messages are also sent. All these are made possible by WhatsApp’s 50 employees.
An excited Zuckerberg who admits WhatsApp is the only app that has grown more quickly than Facebook said Koum and his team has done a great job connecting almost half a billion people.
“I can’t wait for them to join Facebook and help us connect the rest of the world,” he says.