Facebook Buys Mobile Messaging App

561
whatsapp
whatsapp

On October 6, the social media giant Facebook announced that its deal to purchase the mobile messaging application WhatsApp has been completed. This is seen as a significant deal with Facebook, already one of the largest forces in internet communication, acquiring a company that offers messaging services to millions of internet users.

The price of the deal was valued at approximately $19 billion US dollars back in February when the parties first came to an agreement, but the value has since then increased. The bulk of the deal is to be paid in Facebook stock and a recent increase in the share price has pushed the value of the payment close to $22 billion US dollars.

As part of the deal, WhatsApp cofounder Jan Koum will remain at the head of the company along with taking a seat on the Facebook board of directors. The other cofounder of WhatsApp, Brian Acton, will also remain with the company.  The two founders of the messaging app are expected to receive millions of shares from Facebook as compensation for staying with the acquired company.

In a statement to the AFP, Facebook said of the deal,

“We are looking forward to connecting even more people around the world, and continuing to create value for the people who use WhatsApp.”

The deal cleared its final hurdle the Friday before the announcement after being approved by regulators from the European Union. Some telecom companies did show opposition to the deal, claiming that it would reduce competition and vest an undue amount of power into the hands of one company.

Joaquin Almunia, the Competition Commissioner from the EU, stated,

“We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market.”