Social network giants Facebook have announced the purchase of chat application Whatsapp for a sum of $16billion.
Cofounder and CEO Jan Koum will join Facebook’s Board of Directors, but WhatsApp will continue to operate independently within Facebook, much like Instagram. The purchase price rises to as much as $19 billion once you factor in an additional $3 billion in restricted stock units that will be granted to WhatsApp’s founders and employees vesting over the next four years.
“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” Facebook CEO Mark Zuckerberg said in a statement. “I’ve known Jan for a long time and I’m excited to partner with him and his team to make the world more open and connected.” In an investor call, Zuckerberg noted that WhatsApp’s user growth in its first five years far exceeds the rates experienced by Facebook, Twitter or other well-known social-media companies.
“WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world,” Koum said.
WhatsApp has over 450 million monthly users, 70% of whom are active on a given day. They are adding more than 1 million new registered users per day. As part of the deal, its headquarters will remain in Mountain View, CA and WhatsApp’s team will not mix with those working on Facebook’s existing Messenger app.