Facebook overall popularity that it has garnered over the last few years may have reached a point that nearly the zenith, but it seems like the company is still looking to grow by making new acquisitions for further improvement.
Likewise, following the company's previous $1 billion acquisition of popular photo-sharing social networking service Instagram, Facebook is now looking set to dip into its pockets again as it plans to acquire another popular mobile messenger WhatsApp for a whooping $16 billion in cash and stock.
The current deal to buy WhatsApp is by far Facebook's largest acquisition to date. And somehow this one was expected after rumors in late 2012 and early 2013 circulated stating that Facebook and Google were competing to buy the messaging service.
As things stand, the new $16 billion deal to buy WhatsApp include $4 billion in cash and approximately $12 billion worth of Facebook shares. Apart from that, the agreement also mentions about an additional $3 billion in restricted stock units that's to be granted to WhatsApp's founders and employees that will vest over four years subsequent to closing.
"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg, Facebook founder and CEO. "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."
The official press release from the company for the same states that the new acquisition supports Facebook and WhatsApp's shared vision to bring enhanced connectivity and utility to the world that's attainable by delivering core internet services efficiently and affordably. The combination of both is also said to help accelerate growth and user engagement across both companies.
Jan Koum, WhatsApp co-founder and CEO, said, "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."
While the $16 billion amount sounds quite a handful, in case of the deal falling through, Facebook will have to pay a breakup fee of $1 billion to WhatsApp. And that's still more than the total amount Facebook ended up paying to acquire Instagram.
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