In a landmark acquisition, Facebook has purchased WhatsApp for a jaw-dropping $19 billion. The aggressive purchases show how Facebook wants to position their growth, especially among young adults who have started deviating away from the social media platform.
Facebook CEO and founder, Mark Zuckerberg has been impressed with the messaging service, which just launched under five years ago. Its Ukrainian founder, Jan Koum, dropped out of college to focus on the application. In just five years, 450 million users have acquired the app, not including the additional million users flocking to the service daily. During a conference call earlier this week, Zuckerberg was in awe of Koum and the WhatsApp success stating “no one in history of the world” had accomplished such a feat.
Positioning Facebook’s growth is the basis of the massive $19 billion Whatsapp acquisition. Reportedly, Zuckerberg is going to leave the messaging service as a standalone app, as it is now. The purchase can influence Facebook with international users, as WhatsApp’s biggest fan base is seen out of the country. As more teens cool from the Facebook world, the WhatsApp purchase can create a call back to the young audience. Reportedly, Google had shown some interest in the application but the search giant declined to confirm or comment on those rumors.
WhatsApp is a household name because of the service offered. The app permits users to send text messages, picture messages and video with any mobile user, regardless of the operating system. No ads are on the service and for under a buck a year, users are thrilled to enjoy the service.
The meetings between Zuckerberg and Koum started in 2012, as the two regularly met and even spent this past Valentine’s day together with their respective spouses for dinner. Not only has Koum become a billionaire overnight, he will be joining the Facebook board of directors. This move in a win-win for Zuckerberg to enjoy both the talent and the service.
The $19 billion acquisition of WhatsApp by Facebook will be paid out in cash, stocks and $3 billion in restricted stock units. Plus, Koum has an elite standing on the board of directors. Zuckerberg’s pitch to Koum is loudly resonating and coming to fruition. This powerful duo is on their way to “go connect the world.”
Contributing: Li Bouc