Facebook buys WhatsApp with about 19 billion dollars

In Wednesday, Facebook officially announced that it had reached a final agreement with WhatsApp, a cross-platform mobile messaging company, to complete the acquisition of WhatApp with about $16 billion trillion plus 3 billion restricted shares.

How does 19 billion dollars make up?

According to SEC filings, the $19 billion trillion includes 183.9 million shares of Facebook, $12 billion trillion, 4 billion dollars in cash, and 3 billion of restrictive stocks, which were made by Facebook to WhatApp and its employees, with a total value of 19 billion dollars.

What company is WhatsApp?

WhatsApp is an application that allows smartphones to communicate with each other. The application was launched in 2009 by the American Leine Akton (Brian Acton) and the Ukrainian Jane Qom (Koum), the company headquartered in California, both of whom were Yahoo employees

In function, WhatsApp does not resemble the Asian chat application micro-letter, line, KakaoTalk in the cartoon chat expression, the game, the social circle sharing and so on function, the WhatApp function is quite concise, is only uses to help the user to send and receive the text message, this is because when launches the product, Two people's positioning of the product is to let the product become a substitute for mobile phone messages.

Last June, Onavo, a data analyst company, conducted a survey that WhatsApp more than 90% iphone users in many countries in Latin America and Europe. These are also inaccessible areas for similar applications in Asia.

WhatsApp current monthly active user 450 million. The product revenue source is paid for by the user. Last July, the application adjusted the fee model, from a one-time fee of 0.99 dollars of products to the annual cost of 0.99 dollars of products, and the first download can be free to use for one year.

How did the executives react to the deal?

Mark Zuckerberg, the co-founder and chief executive of Facebook, said, "WhatsApp users will reach 1 billion." Achieving this milestone will give WhatsApp incredible value. I have known Jane Qom for a long time and I am very excited to work with him and his team to make the world more open and Koum. ”

"With the simple, powerful and instant messaging capabilities we offer, WhatsApp users are highly involved and are growing fast," said WhatsApp, co-founder and chief executive of the Alliance. We are both excited and honored to work with Mark and Facebook to continue to push our products to more users around the world. ”

What effect will this deal have?

The acquisition will support the common mission of Facebook and WhatsApp to make the world more accessible and practical by providing users with efficient and accountable core Internet services. The acquisition of WhatsApp will allow two companies to accelerate growth and increase user participation.

Facebook shares rose 0.76 dollars in conventional trading in the Nasdaq Stock market in Wednesday, up 1.13% per cent to $68.06. In subsequent trading, Facebook's shares fell 1.21 US dollars, down 1.78%, to $66.85.

In addition, Bloomberg said the deal was the largest acquisition deal in the Internet industry following the merger of Time Warner and AOL in 2001.

What else does the deal need to do?

After the transaction is completed, all WhatsApp shares and options will be written off, in exchange for 4 billion dollars in cash and 183,865,778 shares of Facebooka class common ( According to the average purchase price of USD 65.2650 in the 6 trading days prior to February 18, the above stock value is 12 billion US dollars.

WhatsApp's brand will be preserved; the company's headquarters will remain with California State Mountain View, and Qom will join the Facebook board; WhatsApp's core messaging products and Facebook's existing messenger applications will continue to operate as standalone applications.

If the deal is not completed for regulatory reasons, Facebook will pay $1 billion in cash and $1 billion worth of shares to WhatsApp under an agreement signed by both parties. Investment bank Allen & Company and law firm Weil, Gotshal & Manges LLP provides consulting services to Facebook in this transaction, Morgan Stanley and law firm Fenwick & West, The LLP provides advisory services to WhatsApp.

And finally, why did Facebook spend a lot of money buying WhatsApp? Here are five reasons:

1, future mobile social platforms are essential for Facebook. With the development of mobile Internet, people's social behavior is more and more happening in the mobile scene. Grasping the mobile market is tantamount to seizing the future of social networking.

2,facebook itself is underperforming on the mobile platform. Although Facebook is the world's largest social platform, it has not shown dominance on the mobile side and is constantly challenged by new mobile social applications such as Whatsapp,snapchat.

3,whatsapp is a powerful force in the field of mobile society. WhatsApp monthly active users reached 450 million, of which 70% are active users, and the current daily number of new users reached 1 million. WhatsApp's message is already close to the global SMS delivery volume.

4,facebook has had the experience of successfully acquiring mobile platform applications. One of Facebook's biggest acquisitions on the mobile platform was a 1.2 billion dollar takeover of the Instagam, but Instagram's value was far more than $1.2 billion trillion. The acquisition of WhatsApp is likely to achieve the same effect.

5, the acquisition of WhatsApp in line with Facebook's internationalization strategy. Facebook's users are now breaking 1 billion, and they need to keep developing new markets to maintain their growth. WhatsApp is now the most internationally mobile social application and has a good performance in many emerging markets, and Facebook can use WhatsApp to penetrate these emerging markets.