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Summary:

Messenger app WhatsApp is Facebook’s largest acquisition to date.

MarkZuckerberg

Facebook will acquire messaging company WhatsApp for $16 billion, according to an SEC filing Wednesday. The purchase price includes roughly $4 billion in cash and $12 billion in Facebook stock. An additional $3 billion in restricted stock could be paid out over four years to WhatsApp employees.

This is the largest acquisition the social media company has made to date, nearly 16 times as much as the company paid for Instagram in April 2012.

In a blog post, Facebook pointed to some numbers to help illustrate its decision to acquire WhatsApp. The app has 450 million active users, 70 percent of whom are active in a given day, and is adding over a million new registered users each day. And messaging volume within the app is approaching levels equal to SMS messaging globally. That level of adoption seems to be the clincher for Facebook, which said, “The acquisition supports Facebook and WhatsApp’s shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably.”

Facebook CEO Mark Zuckerberg echoed that sentiment on an investor call Wednesday evening, stressing WhatsApp’s growth and power as a way for Facebook to better serve its mobile and global markets. He also cited the acquisition as a way to strengthen Facebook’s global connectivity initiative internet.org: “We will work hard together over the coming years to help build its users. As part of this, we hope WhatsApp will help us connect the entire world.”

According to a statement by WhatsApp co-founder and CEO Jan Koum, the app — currently available for most major smartphone brands — won’t change:

“WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication.”

As part of the deal, Koum will join Facebook’s board.

Sequoia Capital, the only investor in WhatsApp’s 2011 funding round of $8 million, also released a statement regarding the acquisition. VC Jim Goetz said, “From the time WhatsApp had fewer than ten users, Jan and Brian have been committed to building an enduring service. Now, on their way to a billion, they are just getting started.”

This story was updated several times Wednesday afternoon as more information became available. The headline and lead of the story were corrected to note that the purchase price was $16 billion, and the additional $3 billion is in restricted stock units.

  1. WhatsApp with that valuation?

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  2. How come everyone else is saying $16bn?

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  3. insane number, I know viber is also looking to get acquired….Facebook tried hard to get snapchat and failed…their desperate for the younger userbase Whatsapp provides!

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  4. WhatApp is a profitable investment….but its integration with Facebook will bring a new socio active media…

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  5. I hid my phone number from Facebook so far. Now there is nothing that they don’t know about me.

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  6. WhatsApp is a great…its integration with Facebook might come up with something more cool!

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  7. yeah so I will be leaving whatsapp the day Stalin and his facebook cronies take control. Get ready for ridiculous terms of service, advertising and a stupid like button.

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  8. Fortunately there are a lot of alternative apps out there – lots of guys I know are using this one: https://telegram.org/

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  9. Whats up with WhatsApp’s Security? Multiple SSL vulnerabilities found in Facebook’s new $19B mobile app acquisition http://www.praetorian.com/blog/whats-up-with-whatsapps-security-facebook-ssl-vulnerabilities

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  10. Sarah Lacey over at PandoDaily made a great point that Facebook has acquired or tried to acquire Instagram, Snapchat, and now WhatsApp because of their photo sharing popularity. I think it’s even more than that – it’s the private photo sharing. They already dominate the more “public” photo sharing. Here are my thoughts: http://reelgenie.com/blog/photo-whispers-why-facebook-acquired-whatsapp-for-19-billion/

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