Facebook to Buy WhatsApp for $19 Billion

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Facebook announced today that it agreed to buy the mobile messaging service WhatsApp for $19 billion. Facebook will pay $4 billion in cash, about $12 billion in Facebook stock, and $3 billion in restricted shares, to pay out to WhatsApp employees over the next four years.

WhatsApp launched in 2009 with the right focus on a lean, clean, and fast mobile messaging app. It has 450 million monthly active users, more than 70 percent of whom are active on a daily basis, Facebook said in a press release. The service is also adding 1 million new registered users per day.

“I’m excited to announce that we’ve agreed to acquire WhatsApp and that their entire team will be joining us at Facebook,” Facebook CEO Mark Zuckerberg said in a post published to 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.”

Zuckerberg has been trying to get into the mobile messaging market for a while. The company offered to buy Snapchat for $3 billion last year, but that messaging start-up spurned the offer.

To close the WhatsApp deal, Facebook offered an extra $3 billion in restricted stock units, a common type of equity compensation, to WhatsApp founders and employees. These awards will vest over four years. Jan Koum, WhatsApp’s co-founder and CEO, also gets a seat on Facebook’s board of directors.

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. It will give Facebook an important asset as it seeks to conquer the rest of world and maintain high engagement rates.

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