Facebook’s $19 billion acquisition of mobile messaging service WhatsApp is the company’s largest acquisition and translates to approximately 11 percent of Facebook’s market value. The deal is larger than any acquisition completed by Google, Microsoft or Apple, with Google’s biggest deal being a $12.5 billion purchase of Motorola Mobility and Microsoft’s biggest deal with Skype for $8.5 billion. Apple, contrastingly, has never engaged in a deal over $1 million.
The deal gives WhatsApp creators $12 billion in Facebook stock and $4 billion in cash. Additionally, the 55 founders and employees of WhatsApp will receive $3 billion worth of restricted stock that will vest four years after the deal closes.
The acquisition itself is not all that surprising, the price, however, is a different story. Still, WhatsApp users are part of Facebook’s target market, an audience made up of teenagers and young adults looking to engage in conversations electronically. WhatsApp is a mobile messaging service that allows users to send text messages, videos, pictures and voice recordings one on one or in groups over the Internet.
Facebook says that WhatsApp will remain a separate service like Instagram, a photo-sharing app purchased by Facebook two years ago for $715.3 million. To those who worry that Facebook has overpaid for the messaging app, the company says skeptics should look at the number of global users (since WhatsApp began in Europe, India and Latin America) and the large numbers of users in the U.S. signing up daily. WhatsApp is the only app that has a higher percentage of people using it daily than Facebook.
This latest acquisition is part of Facebook’s “multi-app” strategy, a plan to create its own applications outside of Facebook and acquire others simultaneously. The world’s biggest social networking company acknowledges that people are using multiple apps to communicate and wants to use apps separate from the original Facebook app to engage with its young target audience on a broader level.
For more information about Facebook’s acquisition of WhatsApp please visit http://news.yahoo.com/facebook-buying-messaging-app-whatsapp-19b-235918042–finance.html.