Social networking site Facebook Inc. is all set for another acquisition. As per the latest update, Facebook is mulling to buy mobile-messaging start-up WhatsApp. The deal is expected to close for $16 billion in cash and stock.
An immediate benefit to Facebook in the WhatsApp acquisition is that it will enable two strong social messaging players to be on the same team. WhatsApp is a force to be reckoned with. It has over 450 million monthly active users worldwide and over 320 million daily active users. It claims to be adding one million new registered accounts per day. At the same time, Facebook is growing its mobile footprint with about a billion monthly active mobile users. This makes innovation in mobile services and capabilities an imperative, either organically or by acquiring best-in-class applications like WhatsApp. With the acquisition, Facebook has gained access to
WhatsApp’s large repository of phone numbers, which was a missing link for Facebook’s user information. The access to phone numbers now bridges the offline and online worlds of Facebook users. WhatsApp will also enhance Facebook’s mobile strategy and make the service grow faster and be stickier with mobile first users.
Facebook will, in turn, provide WhatsApp with the funds and resources it needs to develop the service and become an even stronger competitor in an increasingly overcrowded messaging market. WhatsApp has a small team and has only received a modest investment of US$8 million from Sequoia.
Neha Dharia and Eden Zoller, Analysts, Consumer Telecoms, Ovum, comments, “WhatsApp is a force to be reckoned with. It has over 450 million monthly active users worldwide and over 320 million daily active users. It claims to be adding one million new registered accounts per day.”
After the acquisition, WhatsApp Co-Founder & Chief Executive Jan Koum will join Facebook's board, and the social network will grant an additional $3 billion worth of restricted stock units to the WhatsApp's founders.
Â
