Facebook is Buying Messaging App WhatsApp for £9.5 Billion

By Mario Aguilar on at

Facebook just entered into an agreement to buy the hugely popular messaging app, which recently passed the milestone of 400 million active monthly users. The cost? £9.5 billion (more on the price below). Wow.

 

Wait...How Much?

According to the release, the purchase price is £2.3 billion in cash, £7 billion in Facebook stock, plus another £1.7 billion in restricted stock given to the founders and employees, which vests after four years. If you see a £11 billion number floating around out there, that's why. In other words, everyone who works for the company now is getting has a huge incentive to stay on, and it shows that Facebook is interested in the talent that worked on the service in addition to the platform itself.

What the heck is WhatsApp?

WhatsApp is a cross-platform messaging service that works on iOSAndroidBlackberry,Windows Phone, and yes, even Nokia's dying Symbian OS. It's basically IP messaging that works over your data connection or Wi-Fi instead of SMS. It's free for the first year, and then just £0.60 per year after that.

Why does Facebook want WhatsApp?

Facebook has been trying to nail down messaging for sometime now. There were rumours that Facebook offered Snapchat £1.7 billion in cash, which only happened after Facebook tried to build its own version of Snapchat. Facebook Messenger is actually a nice product that works over data internationally much like WhatsApp. Unfortunately, people don't use it, or rather, it's not incorporated into people's lives in the way text messaging has—and that's what Facebook needs. What's more, given Facebook's huge international reach, trying to edge out competitors on that front is a really smart move.

Do you use WhatsApp?