Recently, Facebook, the biggest social networking website bought Whatsapp, mobile messaging startup for a whopping $19 billion in cash and stock (i.e. Rs 1,18,237 crore).
Facebook will be paying $US12 billion in shares and $US4 billion in cash. Also, it will grant $US3 billion in stock options to WhatsApp’s founders Jan Koum and Brian Acton and its employees for the next four years. Also, WhatsApp CEO Jan Koum will be a member of the Facebook board.
WhatsApp is one of the leading mobile messaging services with 450 million monthly users out of which 70 percent of them access the service daily. In spite of the acquisition, Whatsapp users can continue to enjoy the service for a small fee $0.99 without ads interrupting their communication.
A couple of reasons behind this acquisition could be WhatsApp offering of private chatting amongst groups of real time friends and family members as against a “Wall” environment where other casual acquaintances could get to know what a Facebook user prefers/likes.
In fact, WhatsApp’s increasing user base especially the active user category could be one of the prime reasons of this acquisition. Facebook wishes to enter the mobile messaging segment across the world especially in European and Middle East countries where it has still to enjoy a decent active user base.
Facebook has revealed its intentions to offer more user friendly apps in order to engage the existing audience and attract new audience especially teenagers. Acquiring WhatsApp could be the right step to enter the mobile messaging segment by Facebook in an initiative to sustain within evolving world of mobile interface. In a similar model, Facebook had paid $US1 billion when it bought Instagram almost two years ago.
What are WhatsApp users hoping for? Well, they wish that WhatsApp retain its simple, clean and fast interface despite Facebook interface which includes ads, games and gimmicks.