Facebook to pay $16 billion for WhatsApp service

Facebook, the world's largest social network, agreed to acquire mobile-messaging application start-up WhatsApp for $16 billion in cash and stock.

The price is Facebook’s largest acquisition and marks a new height in the frenzy to acquire popular technology start-ups.

Facebook will pay $4 billion in cash and $12 billion worth of Facebook shares. An additional $3 billion in restricted stock units will be granted to WhatsApp employees and founders. These units will vest over the next four years.

“WhatsApp is on a path to connect one billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg, Facebook’s founder and chief executive.

WhatsApp has more than 450 million monthly users, with 70 per cent of those active on a given day.

“WhatsApp’s . . . and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities,” said co-founder and chief executive Jan Koum said. If the merger is not completed, Facebook will pay WhatsApp $1 billion in cash and $1 billion in shares.

– (New York Times)