Why Facebook has bought Whatsapp for whooping $19 billion

Messaging is one of the greatest ways of getting connected with one another. The service providers charge a nominal fee for providing short message service (SMS) to the users. But now in order to save upon costs, people have shifted to such messaging services that allow users to exchange text, files, videos, songs, etc. unlimited free of cost. One such messaging service which has become highly popular is none another than Whatsapp. Whatsapp messenger is a platform that is available in smart phones. The messenger provides its services on Apple, Blackberry, Android, Symbian, etc… operating system enabled smartphones. In a period of mere five years, Whatsapp has gained immense popularity worldwide. With growing subscriptions for connections, the subscriber base for Whatsapp is increasing simultaneously. There are around 400 million users worldwide that actively use Whatsapp on monthly basis.

Whatsapp emerged as a fast growing messaging service worldwide. Facebook, the leading social networking site for people worldwide has acquired Whatsapp for $19 billion. This has become the boldest move made by Facebook in its business dealings. Facebook has crossed its spending limits.

Acquiring Whatsapp:

By making a $19 billion deal, Facebook has proved itself stronger with respect to risk taking capacity. This surprising and mind blowing deal happened on February 19, 2014. By buying Whatsapp, Facebook has also got the rights of acquiring the management team as well as the workforce. Though Whatsapp will be a separate division but it will come under Facebook only.

The CEO of Facebook Mr. Mark Zukerberg explained that

“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”. With respect to the messaging service Mark said that “Whatsapp will complement our existing chat and messaging services to provide new tools for our community. Facebook Messenger is widely used for chatting with your Facebook friends and Whatsapp for communicating with all of your contacts and small groups of people. Since Whatsapp and Messenger serve such different and important uses, we will continue investing in both and making them each great products for everyone.” 

The Buying Breakup:

The $19 billion deal has broken all records of acquisition done by tech companies. Facebook has decided to retain the work force of Whatsapp. However the operations will happen from its Mountain View headquarters only. The initial cash payment of $4 billion will be made by Facebook, Facebook shares worth $12 billion and restricted stock option of $3 billion will be provided to the founders and employees of Whatsapp.

Conclusion:

After Whatsapp emerged in 2009, its unique feature of free messaging service suddenly became a hit in the category of other messaging services like Line, Wechat, Kakao Talk and Kik. But amongst all, Whatsapp has emerged to top the charts. Whatsapp is a promising and valuable service for Facebook. It will prove to be a blue-chip investment for Facebook as and help in increasing subscriber base as and when time will eventually pass by.

Communication is the integral part of our living. It is very essential to stay connected with one and all. And hence, Whatsapp has become a classic example. By Facebook and Whatsapp being together, it will indeed impact in growing the communication options for its users.

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