WhatsApp Acquired By Facebook For $19 Billion
WhatsApp was acquired by Facebook for $19 billion. The messaging application essentially allows users to send text messages without an additional charge. Although the messaging is linked to users’ cell phone numbers, the texts are sent through mobile broadband.
The application is currently listed as the most popular messaging software. With more than 450 million current users, WhatsApp adds nearly a million new users each day. Facebook Messenger is currently the second most popular messaging application. Therefore, the acquisition will solidify Facebook’s position in the top spot.
WhatsApp’s popularity has steadily increased as it is cost-effective. Mobile carriers traditionally charge additional fees for text messages — particularly those exchanged overseas. By avoiding cell phone networks, users can avoid the often excessive extra fees.
CNN reports that the messaging service is free for the first year. However, WhatsApp costs $1 per year thereafter. The minimal fee is far less than mobile carriers charge for international texting.
As part of the deal, CEO Mark Zuckerberg has committed to retaining current WhatsApp employees. WhatApp will simply be available as a separate application within Facebook. The plan is similar to Facebook’s inclusion if Instagram.
The acquisition includes $4 billion cash, $12 billion in stock, and $3 billion in stock grants. The grants will be distributed to employees who complete a four-year contract with Facebook following the acquisition.
Additionally, WhatsApp CEO Jan Koum was appointed to Facebook’s board of directors.
A native of the Ukraine, Koum’s story is an inspiration. Born and raised in a rural village, he grew up in a home without hot water or a telephone. As the political environment was bleak and the family faced numerous anti-Semitic threats, Koum’s mother fled the Ukraine with her only son.
Koum and his mother settled in Mountain View, California, when he was 16 years old. Although they made it to America, the family continued to struggle. Koum’s mother was eventually diagnosed with cancer.
The ailing mother received a disability check every month. However, it barely covered necessary expenses for she and her son. Forbes reports that Koum often worked odd jobs to contribute.
In his spare time Koum read books about computer networking, which he purchased from used book stores. The determined young man eventually landed a job with Ernst & Young, where he continued to work as he attended San Jose State University.
Koum eventually left Ernst & Young to work for Yahoo. As the job was particularly demanding, he made the decision to drop out of college.
In 2000, Koum lost his mother to cancer. He also lost millions during the dotcom bust. Although he struggled for years, he and two friends eventually came up with an idea for a new mobile application. On February 29, 2009, Koum incorporated WhatsApp.
Five years later, WhatsApp has made him a multimillionaire.
