Whats App acquired by Facebook

Whats App acquired by Facebook without impacting 450M users

Ironic.. Isnt’t it?

Facebook just spent $16 billion to acquire WhatsApp, spending $4 billion in cash and $12 billion in Facebook stock (it’ll also kick in another $3 billion of stock over the next four years for good measure). It’s by far Facebook’s biggest acquisition — 16 times larger than what the social network paid for Instagram.

WhatsApp is one among many similar services, but it’s by far the most popular, with 450 million active users. Chinese competitor WeChat claims 270 million active users, and Japan’s Line recently passed 300 million registered accounts (though active users are a subset of that). Viber, Kik, ChatON and others are all players, too.

Although WhatsApp has more general appeal than many of its alternatives, its popularity varies by region as well. It’s huge in India, for example, where the app is even available on feature phones, such as the Nokia Asha line. Since those phones require extremely small or nonexistent data fees, it’s easy to see why WhatsApp and its SMS-avoiding brethren have become so popular in markets where fewer people can afford expensive smartphones and the data plans to go with them.

Facebook paid $16 billion for it because it achieved what Facebook couldn’t on its own: Significant mindshare and active use in parts of the world where the mobile market is poised to explode in the coming years.

The aspect of the deal appears to be a major point of emphasis for WhatsApp. In its own blog post, the company made sure to highlight that joining Facebook will not impact its 450 million monthly active users.

WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication. There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.

Facebook took a similar “hands off” approach to Instagram and has seen success from the photo sharing app. Instagram started to run its first set of advertisements last fall, and added a new private messaging feature of its own in December.

WhatsApp will compete somewhat with Facebook’s own standalone messaging app Messenger, although the majority of WhatsApps users appear to be international. This should help Facebook add an even stronger international presence, even if WhatsApp operates independently.


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