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Facebook to buy Whatsapp for $19 billion

Tom Morgan
20 Feb 2014
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Facebook has purchased the Whatsapp smartphone messenger app for a reported $19 billion, comprised of cash, shares and stock options

Facebook has bought out messaging app WhatsApp in a deal reportedly worth a total of $19 billion (£11.4bn), comprised mainly of cash but also including shares in the social network.

WhatsApp has 450 million active monthly users, across iOS, Android, Windows Phone and Blackberry mobile operating systems. According to the company around one million new users sign up every day.

The app sends text and photo messages using an internet connection, avoiding SMS text messaging fees. The company, which is comprised of around 50 employees, currently charges users $1 a year after an initial one year free period, but does not use in-app adverts. According to Facebook, it has no plans to change this setup. Company founder Mark Zuckerberg said he didn't see adverts as the right way to make money from any instant messaging system.

WhatsApp co-founder Jan Koum said the company will continue to run "independently and autonomously". Koum, a former Yahoo! employee, will now become a member of Facebook's board of directors and becomes one of Silicon Valley's newest billionaires. In a statement, he said, "We're excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world."

WhatsApp marks Facebook's biggest purchase to date, having previously acquired photo-sharing app Instagram for a reported $1 billion. Facebook itself generated $16 billion when it was floated on the NASDAQ stock exchange. The deal was reportedly closed in less than two weeks, and is comprised of $4 billion in cash, approximately $12 billion of Facebook shares and an extra $3 billion in stock payable to WhatsApp's founders and employees at an unspecified date in the future.

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