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Facebook plans on purchasing WhatsApp for $19 billion

Facebook plans on purchasing WhatsApp for $19 billion
Facebook plans on purchasing WhatsApp for $19 billion
Popular messaging service bought out by Facebook for $19 billion in cash, stock and restricted shares.

Facebook has a track record of purchasing popular social network apps, having acquired Instagram a few years ago, and they're at it once more. In a surprising announcement, CEO Mark Zuckerberg unveiled that Facebook plans on purchasing popular messaging client WhatsApp, with the sale coming in at a total of $19 billion.

With over 450 million monthly users, WhatsApp allows users to bypass SMS charges and send messages over the internet. This is apparently extremely valuable to Facebook, and the deal includes $4bn in cash, $12bn in Facebook stock and another $3bn in restricted shares that will be awarded to employees over a period of 4 years following the purchase. The majority of WhatsApp's employees will also join Facebook in Silicon Valley, with CEO and co-founder Jan Koum becoming a board member.

Although WhatsApp's large user base is sure to prove valuable to Facebook, the app has always run under the maxim "no ads, no games, no gimmicks", instead generating money through a yearly subscription of just 99 cents. As such, it will be interesting to see what moves Facebook has planned for the future, despite Koum's strong assurances that nothing will change for users.


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Omar Qudsi, 2014-02-20 (Update: 2014-02-21)