Facebook Purchase Whatsapp for $19 Billion

For all the fans of social networking websites, there is not anything more stirring than two of the major social networks coming together to offer more valuable services to its users. Well, the latest news has been created by the father of all social networking websites i.e. Facebook by acquiring the popular messenger Whatsapp for a large sum of $19 billion. Facebook has granted for this deal and it will be taking over the messenger in terms of both cash as well as stocks. This is yet another smash hit success of Facebook, which has now managed to belittle all the major start-ups that are being visualize each day.

Introduction to Whatsapp

Whatsapp was a small company with only 55 employees. The main plan of Whatsapp is to change the old method of sending and receiving text messages. This company achieved its target with double the amount of users since the last few months. at this time, the approximate users of Whatsapp are about 450 million around the globe. This means that Whatsapp is more fashionable among the masses as compared to the top micro blogging website like Twitter. The full figure of Twitter users is about 240 million and the company presently stands at a value of $30 billion.

More information about the deal

By choosing to take over Whatsapp, Facebook has manage to strike the largest deal of all times. Also, at the whooping sum being spent on this deal, Facebook also holds the record of making the most high-priced purchase online. Out of the $19 billion, $3 billion will be limited in terms of stock units and the same will be approved to the proud owners of Whatsapp as well as its workers over a time period of next 4 years.

This contract has not only added billions of bucks into the account of Whatsapp founder, slightly it has also resulted in the windfall for the only venture firm that was supporting Whatsapp, Sequoia Capital. According to some dependable sources, the firm Sequoia Capital has made an investment of $60 million around $3 billion for this deal. This huge deal striven by Facebook is way in front of other recent start-ups that took place among some of the chief companies in the world. For example, in the year 2012 Facebook bought Instagram, which is a picture- sharing social website for a total of $1 billion and equally, Microsoft bought Skype, the video calling company for a total of $8.5 billion a year ahead of that.

However, the profits made by Whatsapp is being reserved as a secret by its founders. They declined to remark on the same when contacted by media persons. It is a identified fact that it is totally free to use Whatsapp for the year and after that, every consumer has to pay 99 cents a year in order to continue the services. Also, Whatsapp doesn’t make use of advertisements for the reason of collecting revenue. When contacted, the CEO of Facebook Mark Zuckerberg said that using ads for monetization of messaging services was not the right thing to do.

This astonishing purchase has come to the publicity months after Facebook failed to acquire another messaging service which is very fashionable between youngsters i.e.Snapchat. Facebook attempted to acquire Snapchat for $3 billion last year but unsuccessful due to some unknown reasons. However, this is not the first time when someone has tried to purchase Whatsapp. Looking at the popularity of this messenger, Google Inc. also approached it but all was in vain.

When contacted, Facebook officials have made clear that both Facebook as well as Whatsapp will be operating individually in order to maintain the mentality and quality of a startup venture.