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In what is termed as the biggest acquisition for a social media company, Facebook acquired WhatsApp, the mobile messaging service for $19 billion ($4 billion in cash, $3 billion in restricted shares, and around $12 billion in Facebook stock). The purchase was done in a mix of stock and cash. Founder of Facebook Mark Zuckerberg, is of the opinion that WhatsApp is an “incredibly valuable” service that was on the threshold to connect around one billion people from all over the world.

The popularity of WhatsApp has soared to an indomitable height ever since its inception. Similar to the method of traditional text messaging, WhatsApp connects people from all corners through their cell phone numbers. It makes a unique and amazing smartphone application that allows users of BlackBerrys, iPhones, and Android phones to send messages, share photos without the need to pay any additional fees. WhatsApp uses the internet for sending text messages making it the most affordable communication platform for people all over the world. WhatsApp is free to use for the first year, costing just a dollar from the second year.

Speaking of WhatsApp Mark Zuckerberg, Facebook CEO said, “No one in the history of the world has done anything like that.” He also stated that WhatsApp is “an extremely high-quality product with incredibly strong engagement and rapid growth.” He further added that “It’s the only widely used app we’ve ever seen that has a higher rate of engagement than Facebook itself.” Ranking next to WhatsApp is Facebook’s Messenger, its detached messaging app. So WhatsApp was bought not to drive revenue from it, but to add more worth to the already existing messaging platform of Facebook, for improvising its future and to enhance its growth.

In the year 2012, Facebook had bought Instagram for $ one billion for the same reasons. And, similar to Instagram, WhatsApp will now operate as an independent unit within Facebook. All the existing employees will be collaborating as part of the contract.

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References:

Forbes

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