Accessability Links
Cookies on our website
By continuing to use this website we will assume you are happy to receive cookies as outlined in our cookie policy
Accept Policy

Facebook buying WhatsApp for $19bn

Feb 21
Share this story:
Facebook buying WhatsApp for $19bn

Social media behemoth Facebook is to buy messaging service WhatsApp for $19 billion (£9 billion) as it looks to appeal to younger people and expand into international markets.
It is Facebook’s biggest acquisition yet and is valued some way above its previous biggest buy, photo-sharing network Instagram, which it paid $1bn for in 2012.
WhatsApp, which has more than 450 million monthly global users, allows people to send unlimited text and picture messages to each other. It is proving extremely popular with users looking to avoid mobile phone fees.
The deal means Facebook will have access to the millions of people who use WhatsApp every month and allow it to strengthen its relationship with younger users, who are slowly starting to drift away from the social network.
But some analysts are warning that this latest in a string of big-ticket tech deals is a sign of an impending dot-com bubble.
‘Incredibly valuable’
“WhatsApp is on a path to connect one billion people,” said Facebook founder and CEO Mark Zuckerberg.
“The services that reach that milestone are all incredibly valuable. I’ve known Jan [Koum, WhatsApp founder and CEO] for a long time and I’m excited to partner with him and his team to make the world more open and connected.”
WhatsApp does not make money for advertising but makes money by charging users a subscription fee of $1 per year, as well as offering a free model.
Under the terms of the deal, Facebook will pay $4 billion in cash and approximately $12 billion in Facebook shares, plus $3 billion in stock to be granted to WhatsApp’s founders and employees at a later date.
The latest blockbuster takeover follows – and supersedes – Yahoo’s $1 billion acquisition of blogging site Tumblr last year the 2008 deal that saw AOL by social networking site Bebo in a deal worth $850 million.
‘Lot of scepticism’
But there are fears that such high-value deals will lead to a repeat of the fluctuations in the tech sector circa 1997-2000, when many online firms failed, some spectacularly.
Anthony Sabino, a business professor at St John’s University in New York, said the deal could raise concerns that Facebook, along with other firms, are pursuing acquisition with too much zeal.
"This could be seen as a microcosm of a bubble," he said. "I expect there to be a lot of scepticism about this deal. People are going to look at this and say, 'Uh, oh, did they pay way too much for this?"
However, Cathy Boyle, a senior analyst at research firm eMarketer, said the WhatsApp buy could prove valuable to Facebook.
"WhatsApp actually has greater penetration in a lot of international markets than Facebook," she told BBC News.
Observers thought that Facebook’s Instagram buy was massive, but that is now dwarfed by WhatsApp. Whether or not it proves to be massive success or a very expensive misfire remains to be seen.
The deal is expected to close later this year.
Search for the latest management consultancy jobs and consulting recruitment opportunities or contact us on +44(0)207 089 9017 

Share this story:
Add new comment
Jobs Related to this Post
5 result(s) found 
Page 1 of 1 

$150k-$400k US dollar packages
China and Asia
Our client is a supply chain advisory business which has expanded rapidly in Asia. They have opportunities for Manager and Principal Level candidates.  General Expectations: • Lead the client
£120k plus 20% bonus, plus £...
Central London and UK
Our client inspires healthy habits for real life. They meet ther members where they are and leverage the latest nutritional and behavioral science to help them eat healthier, move more
£60k-£80k plus bonus, benefi...
Central London and UK
Our client has a strong record of working with C-level leaders in major private and public sector organisations, directly addressing their greatest strategic challenges
£30k-£70k plus bonus, benefi...
Opportunities in London, Bristol, Manc...
  Resume - William Ng Are you looking for an opportunity to work at the cutting edge of public service reform?  Our client are seeking a highly-professional
£28K - £45K base + bonus, be...
Central London
My client is an award winning London based Technology & Media - Research & Strategy Boutique Consulting Firm.  They are looking for a Business Analyst with consulting